Home loan entitles Individuals to Deduction Under Section 80C of up to Rs. 1.50 Lakh and Interest Deduction under section 24 of up to Rs. 2 Lakh. Articles deals with Faqs on Benefit U/s. 24 and 80C on Jointly Owned Property, Under Construction Property, multiple properties and Simultaneous benefit of Interest exemption and HRA.
Q-1 What are Income tax benefits of taking and repaying a housing loan under EMI Plan?
You will be eligible to claim both the interest and principal components of your repayment during the year.
- Interest can be claimed as a deduction under Section 24. You can claim up to Rs. 200,000 (Rs. 150000/- up to A.Y. 2014-15) or the actual interest repaid whichever is lower. (You can claim this interest only when you are in possession of the house)
- Principal can be claimed up to the maximum of Rs. 150,000 (Rs. 100000/- up to A.Y. 2014-15) under Section 80C. This is subject to the maximum level of Rs 150,000 (Rs. 100000/- up to A.Y. 2014-15) across all 80C investments.
- You will need to show the statement provided by the lender showing the repayment for the year as well as the interest & principal components of the same.
Q-2 If I buy a house jointly with my wife and take a joint home loan, Can we both claim income tax deduction?
Ans:-Yes, if your wife is working and has a separate source of income, both of you can claim separate deductions in your income tax returns.The repayment of principal amount of the loan can be claimed as a deduction under section 80C up to a maximum amount of Rs. 1.50 (Rs. 1 Lakh up to A.Y. 2014-15) lakh individually by each co-owner.
In cases where the house is owned by more than one person and is also self-occupied by each co-owner, each co-owner shall be entitled to the deduction individually on account of interest on borrowed money up to a maximum amount of Rs. 2 lakh (Rs. 1.50 Lakh up to A.Y. 2014-15). If the house is given on rent, there is no restriction on this amount. Both co-owners can claim deductions in the ratio of ownership.
Q-3 My husband and I have jointly taken a home loan. He pays 75 percent of the EMI. What will be our individual tax benefits?
Ans: – As you have taken a joint home loan, both of you are eligible for tax exemption for your share of the EMI paid. For claiming income tax deduction, the EMI amount is divided into the principal and interest components. The repayment of the principal amount of loan is claimed as a deduction under section 80C of the Income Tax Act up to a maximum amount of Rs. 1.50 (Rs. 1 Lakh up to A.Y. 2014-15) lakh individually by each co-owner. The repayment of the interest portion of the EMI is also allowed as a deduction under section 24 of the Act, which is given under the head “income from house property”. In case you are living in the house for which home loan is taken, both of you shall be entitled to deduction in the ratio (3:1) on account of interest on borrowed money up to a maximum of Rs. 2 lakh individually (Rs. 1.50 Lakh up to A.Y. 2014-15). If the house is given on rent, there is no restriction on this amount and both co-owners can claim deduction in the ratio of ownership- 3:1 in your case.
Q- 4 plan to buy a house by raising loans from friends and relatives. Will I be eligible for tax benefit from all sources?
Ans: – Interest payment to friends and relatives can be claimed u/s 24 but only against a certificate received from them. In the absence of the certificate, you would not be eligible for the deduction. The recipient of interest income who issues the certificate is liable to pay tax on the interest income that he receives. As far as the principal payments are concerned, they would not qualify for tax benefit as loans only from notified institutions and banks are eligible for such deductions.
Q- 5 What are the tax benefits that I can avail of for repaying a home loan ?
You will be eligible to claim both the interest and principal components of your repayment during the year.
- Interest can be claimed as a deduction under Section 24. You can claim up to Rs. 200,000 (Rs. 1.50 Lakh up to A.Y. 2014-15) or the actual interest repaid whichever is lower. (You can claim this interest only when you are in possession of the house).
- Principal can be claimed up to the maximum of Rs. 150,000 (Rs. 1 Lakh up to A.Y. 2014-15) under Section 80C. This is subject to the maximum level of Rs 150,000 (Rs. 1 Lakh up to A.Y. 2014-15) across all 80C investments.
- You will need to show the statement provided by the lender showing the repayment for the year as well as the interest & principal components of the same. Double Benefit on Taxes on Housing Loan
Q- 6 . Can I take advantage of tax benefits from a home loan as well as claim House Rent Allowance (HRA) ?
If you took a home loan and are still living in a rented place, you will be entitled to:
1. Tax benefit on principal repayment under Section 80C
2. Tax benefit on interest payment under Section 24
3. House Rent Allowance (HRA) benefit
Of course, you can claim tax benefits on the home loan only if your home is ready to live in during that financial year. Once the construction on your home is complete, the HRA benefit stops. If you took a home loan, got possession of the house, have rented it out and stay in a rented accommodation, you will be entitled to all the three benefits mentioned above. However, in this case, the rent you receive would be considered as your taxable income.
Q- 7. I have a home loan in which I am a co-applicant. However, the total EMI amount is paid by me. What is the total income tax exemption that I can avail of ?
Yes, you can claim income tax exemption if you are a co applicant in a housing loan as long as you are also the owner or co owner of the property in question. If you are only person repaying the loan, you can claim the entire tax benefit for yourself (provided you are an owner or co-owner). You should enter into a simple agreement with the other borrowers stating that you will be repaying the entire loan. If you are paying part of the EMI, you will get tax benefits in the proportion to your share in the loan.
Q- 8. I have two housing loans on two different properties. Can I get tax rebate under sec 80 C of both the loans?
Yes, you can get the 80C benefit on both loans. However, the total amount that you will be entitled to will be a total of Rs 150,000 (Rs. 1 Lakh up to A.Y. 2014-15) across both the homes.
The interest paid on a home loan is not directly deductible from your salary income for either of your flat loans. Income from house property will be calculated for each flat you own. If either of theses calculations shows a loss, this loss can be set off against your income from other heads. Please note with effect from financial year 2017-18 Govt has restricted the limit of set off of loss from house property against other heads of Income to Rs. 2 Lakh. Till financial year 2016-17 there was no restriction and assessee was allowed to set-off any loss from house property against other heads of Income. Please note the restriction is placed on set-off of losses and not on the amount of home loan interest that can be claimed as a deduction under Section 24 for a rented house property, the losses which could arise on account of such interest repayment can be set off only to the extent of Rs 2 lakhs. Such loss in excess of Rs. 2 Lakh can be carried forward for upto 8 Assessment Years succeeding the year of loss and can be set off against Income under the head House Property.
As for Section 24 deduction, on your self-occupied house you can take advantage of interest payments up to Rs.2,00,000 (Rs. 1.50 Lakh up to A.Y. 2014-15). For the other property, you can claim actual interest repaid, there is no limit for the same.
Q- 9.I live in Delhi in my own house. In 2011, I took a housing loan to fund the purchase of an under-construction flat in another city (Faridabad which comes under National Capital Region of Delhi but otherwise falls in Haryana). It is expected to be completed in FY 19. I haven’t claimed any tax benefit so far. What happens to the loan installments I have paid so far? Can they also be claimed for tax benefit?
According to the Income-tax Act, 1961, where the property has been acquired or constructed with borrowed capital, the interest payable on such capital for the period prior to the year in which the property has been acquired shall be allowed as deduction in five equal instalments beginning from the year in which the property is acquired. Thus, the interest included in the loan instalment paid by you during the construction period shall be eligible for deduction from the year in which the flat is acquired/construction is completed.
The principal amount of the loan repaid till date shall not be available as a deduction under section 80C till the time the construction of the flat gets completed. Once the flat is completed and the possession is handed over to you, you will be eligible to claim deduction for interest paid on the loan under section 24(b) and principal amount of loan under section 80C. The total amount of deduction available under section 80C shall be limited to Rs. 1.50 lakh (Rs. 1 Lakh up to A.Y. 2014-15). Thus, as of now, you are not eligible for any tax benefit on such loan repayments.
Q. 10 Is there any additional deduction which I can claim in respect of Interest on Housing loan in addition to interest Under Section 24(b)?
Ans. Finance Minister inserted a new section 80EE relating to the additional deduction in respect of interest on loan taken for residential house property. Assessee can avail the benefits of this section in A.Y. 2017-18 & subsequent assessment years till the loan is repaid. Purpose of this section is to promote house ownership & give a fillip to a number of industries like steel, cement, brick, wood etc. besides jobs to thousands of construction workers. to get more information on the please read the Full Article – Section 80EE Income Tax Benefit on Home Loan Interest
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Things you must know about tax benefits on home loan
1. Home loan borrowers are entitled to tax benefits under Section 80C and Section 24 of the Income Tax Act. These can be claimed by the property’s owner.
2. In the case of co-owners, all are entitled to tax benefits provided they are co-borrowers for the home loan too. The limit applies to each co-owner.
3. A co-owner, who is not a co-borrower, is not entitled to tax benefits. Similarly, a co-borrower, who is not a co-owner, cannot claim benefits.
4. Housing companies usually require all co-owners to be joint borrowers to a home loan. Loan providers specify who can be a joint borrower for a home loan.
5. The tax benefit is shared by each joint owner in proportion to his share in the home loan. It’s important to establish the share for each co-borrower to claim tax benefits.
6. The certificate issued by the housing loan company, showing the split between principal and interest for the EMIs paid, is required for claiming tax benefits.
(Republished with Amendments)
i have avail housing loan (home loan) Rs. 450000 in the year of 2000. i have also plan to additional construction Rs. 500000 at same property. please tell, will i get the income tax benifits rebate upto Rs. 100000 on EMI.
dear sir,
i have taken a home loan with my mom and me… my mom is first applicant and second one is I. in property document both names are included. the EMI of loan paid by the joint account of us. then can i take advantage of tax benefit?
Hi, I am having 3 home loans, out of which for first two i am claiming tax benefits, second being let out, using form 12-c, now can i claim tax benefit on third home loan also, same as second one which is on rent ?
regards
kingtaran
Hi,
Following are my questions which are not cleared from above article:-
Scenario: Me and My wife has taken home loan of 35 Lakh. Both are co-applicant on home loan as well as on property. House is currently under construction.
Question 1:- As per IT act there is a upper limit of 1.5 Lakh on interest paid on the home loan under Section 24. So If we are not eligible on tax benefit during the construction period but we can take tax benefit for next five consecutive year for the 1/5th of total interest paid till possession. Now my question is that the upper limit of taking tax benefit will remain 1.5 Lakh or it will also go up proportionately??
Question 2:- If EMI is deducting from my bank account then can my wife also avail the tax benefit or we need to open a Joint account and from that account we need to pay EMI?
Question 3:- We both are co borrower for home loan and co applicant for Flat, but the ownership or loan % is not mentioned anywhere then is that means we both have equal share on home loan as well as on Flat?
Please advise.
Many Thanks
Dear Sir
I have taken Home Loan FROM HFCL. (21.5 Lakhs) Am co-applicant for Loan and am the installment paying every month. But house owner ship is on my wife name alone. Am just co applicant for home loan and 100% loan re payment is doing by me.. whether shall i get Home loan tax benefit.. am working under Govt. of India…?
Dear Sir
I have taken Home Loan FROM HFCL. (21.5 Lakhs). I am co-applicant for Loan and am the installment paying every month. But owner ship of house is on my wife name. Am just co applicant for home loan and 100% loan re payment is doing by me.. whether shall i get Home loan tax benefit.. am working under Govt. of Haryana…?
Hello Sir/Madam,
Recently we have taken house loan to purchase a flat in Hyderabad.
It is still under construction and we are staying in Rented house.The flat will hand over ed to us in next June 2014.
Shall I get the tax benefit for loan principle amount and interest.As I am paying now Pre-EMI for the loan amount.How can I claim the amount.
Kindly help me in declaring properly for house rent and loan amount.
With Regards
Hello Sir/Madam,
Recently we have taken house loan to purchase a flat in hyderabad.
It is still under construction and we are staying in Rented house.
That house will be hand over ed in next June 2014.so,Can we get the tax benefit for this house loan interest and principle amount.
Kindly help me in on this.
I took home loan and house registration was on my father name can i get tax exemption and all the EMI are paid by me ?
i took home loan and house registration was on my father name can i get tax exemption ?
I took home loan and house registration was on my father name can i get tax exemption and all the EMI are paid by me ?
I have a housing loan of 25 lacs taken last year, the same is having 3 coborrowers, me, my dad & my mom. Housing Loan EMI is paid by only me from my sallary account, but the property is on the name of my dad & my mom, My question is-
1. Can i claim the interest under my ITR.
2. If i can Claim, upto what interest is aplicable as it’s just the start of loan & i am paying of about 2.5 lacs of interest.
I have purchased a home on name of my wife and loan is also on her name, Can me as well as my wife can get the tax exemption
I have take a loan of Rs.12 lacs for purchasing a plot in HUDA govt approved sector & i am paying the monthly instalment for this ,the instalment include both Premium as well as interest , As per Income tax exemption can i avail the benefit under section 80 C or Section 24 or any other section of income tax act for exemption ,
please clerfy this on urgent basis.
Thanks & regards.
Hi,
I bought a resale flat from a party in the month of Feb 2013 and have taken a home loan for the same. I am paying the EMI from March 2013 for the full loan amount disbursed at one shot. I am currently staying in this flat; however I have not taken a possession certificate for the same. Can I claim income tax exemption on the home loan without the possession certificate? If not, with whom should I claim the possession certificate? Is it the builder or the first owner of the flat? Is the possession certificate is mandatory to claim Income tax exemption?
Sir,
i have a property at my native(solapur) where my parents are living. Home loan on that property is nill now. I am planning to purchase a property in hyderabad where i am living now. Can I get tax rebate on interest and principle for this property?
Me and My wife had purchased flat in joint name in Ghaziabad thru joint bank loan in yr 2004 and still paying EMIs from my salary account. Me and my wife had purchased another house in east delhi in 2012 thru joint bank loan and paying EMIs again from my salary account.
I am living at west delhi in furnished rented accomodation and my family is living in Ghaziabad flat.
Can I claim HRA tax benifit and loan repayment deduction of principal amount u/s 80c as well as interest repayment u/s 24 of income tax???
pl guide..
we (me and my wife) have taken a property on both our names.but home loan has taken from my wife,s name now emi goes from our joint acount which is paid from my indivisual salary. can i taken rebate from that loan? pls suggest me. if my wife has no need to taken that type of rebate.
Me and My wife purchased a home. My Wife is a Housewife. But Loan and House Property are joined. Whether I Can Avail my loan Interest and Principal fully. EMI is deducted my account only. If is ok kindly send the Income tax act and section for this.
I took loan in March-2012 and I am paying EMI from march-2012.
Now in march-2013 I got the possession.
Can I avail full Interest paid in this financial year itself or 20% Interest only will be considered for the tax benefit.
Hi I have bought a resale flat from a party in Nov 2012 and have taken a home loan for the same. I am paying the EMI from Nov 2013 for the full loan amount disbursed at one shot. I am currently staying in this flat; however I have not taken a possession certificate for the same. Can I claim income tax exemption on the home loan without the possession certificate? If not, with whom should I claim the possession certificate? Is it the builder or the first owner of the flat from whom I purchased this flat?
Hi myself & My wife , both Govt. Employee, are co-borrower & Co-owner (Loan provided from Bank for purchase of land & House building construction). Pre-EMI interest has been started from Jan’2013 after obtaining Loan for purchasing land only & Construction is yet to start. This pre-EMI interest is being debitted from my A/c only. But the Bank has given certificate for interest for 2012-13 FY in the name of both.Whether I can claim tax benifit U/s 24 for the interest paid from Jan-March’2013? Whether my wife can claim also? What will be the limit for individual tax rebate for this FY 2012-13? For the next year can both of us share this rebate by sharing (by inclusion my wife’s name with my A/C)?
Dear Sir,
we are three co-owner of house my father, my Mother & Me. loan EMI is payed through my father account but my father retired now and we both want to take benefit (i.e. Me & my father )can we take 50:50 benefit of home loan?
please guide me…
Thank You,
Chetan
have purchased a home on name of my wife and have taken loan jointly. Can i take Income Tax Deduction ?
My wife has a single storied house property. We are planning to built first floor. I am only the earning member and planning to take the home loan jointly. Can i get income tax deduction
dear sir
I have own house and i have home loan on that house. Now i would like to go for purchasing site under house loan scheme. Bank has given 3 years time to construct the house. Can i avail the benifit of housing loan for tax benifit which i have taken for site but construction work is not at all started.
Hi,
I have two houses.
1. One is an Apartment in which me and my family is living. I am the only owner of this house and have been claiming interest on housing loan for the past 9 years.
2. The second is a flat which is under construction bought this(Done agreement with builder) year (2013 January). This is a joint ownership between me and my wife & I’m paying EMI. The housing loan is also Joint Loan. We are already paying the full EMI, even though the flat is in construction & posession is expected in December’2015.
1. So, I’m claiming principal(Under 80C ) and 40000 Interest claim for income tax rebate against 1st flat.
My question is Can I claim the housing loan interest rebate on 2nd flat over the next 5 years after posession / once the construction will be complete. Up to what amount (ON interest ) I can claim interest rebate, if i’ll show deemed to be let out or show as vacant.
Thanks & Regards,
Ayush
PLEASE STOP PUTTING UP YOUR QUESTION. THE AUTHOR/WEBSITE DOES NOT ANSWER THE QUERY.
Sir ,
I have paid my Housing Loan with full interest in due course , in our Postal Department , 2 Percent Rebate is being given from the interest paid earlier towards Housing Loan if repayment is made without break. My department has granted me Rebate of Rs. 17000/- towards successful repayment of Housing Loan. But department has paid me this rebate amount by deducting Income Tex at Source. Sir , I wants to know whether Rebate PAID towards successful repayment of housing loan IS taxable , if yes than under which section of Income Tex Act .
Dear All,
Just wanted to know whether Hsg Loan interest benifit under section 24 can be taken when the house is under construction – EMI is getting deducted – 1/5th part in the present fy yr ie…1,50,000 = 30,000 amt i section 24
Dear Sandeep,
I need to know if I can use long term capital gain (made by selling one plot) to clear the principal amount of the running home loan without paying any long term capital gain tax.
Sir
i bought a house only on my name in 2009 having home loan. the EMI is 14000/-. i occupied this flat with my parents. t took benefit of H.loan in IT. Now i transfered to other place. My parents is still leaving in that house. now i planning to buy new house on my and my wife,s name.the expected EMI will be 38000/-. i will take home load on both name and EMI deducted from joint account.my wife is also working.How we both can take maximume IT benefit from both properties.
Can I take advantage of tax benefits from a home loan as well as claim House Rent Allowance (HRA) ? If i do not let out my own house on rent.
I have bought a home and its registered on my mother name however I am the main and only applicant in the loan taken against the property and i am paying the loan on my own from my salaried account. Am I applicable to for the Income tax exemption.
dear sir,
I bought one proper in my home town Jaipur and currently working in Mumbai.
I want to get registration benefit of 1% for that I have to register it only on the my mother or I can also apply as a coowner.
also note my mother is not earning, so I have to pay all EMI’s.
please let us know in both of the above cases I can get income tax benefit aswell?
thanks
Sir,
My wife planned to buy a house on her name but she was not eligible for the amount which we required .Hence to enhance the eligibility my salary also considered and we bought the loan. In this case Am i eligible for to get Income tax deduction kindly note i was only co borrower in my name property was not registered pl guide me
I have a plot in the name of my wife. I am getting a loan for construction on this as guranter and will repay the full EMI from myself. Will I be entitled to get exemption in IT Act from my salary ?
My husband and I bought a plot of DTP approved land in our joint names and have got a house loan on it. We are planning to build a house there within 3 yrs as we were told that we can claim tax deduction only if we build in 3 yrs of taking the loan. Can I claim tax deduction for this house loan from now itself? or do I have to wait to claim only after the house is completed?
I need to know what if in case of co-owner(50:50), their interest comes to more then 1,50,000/- limit( i.e total interest comes to 4,00,000/-) then how it will be allocated to both of them. Please Reply.
Dear Sir,
I have constructed my house availing home loan and completed certificate given on February 2013, though i am paying emi for the principal amount since September 2012(total 7 installment), My question is September to January(5 installment) principal payment during construction will give me any benefit u/s 80c?
Regards
Soumen
From Jan 2009, I took a housing loan to fund the purchase of an under-construction flat in coimbatore city . It is expected to be completed in FY13-14. I haven’t claimed any tax benefit so far. What happens to the loan instalments I have paid so far? Can they also be claimed for tax benefit? – See more at:
I stay in company leased flat. In place of getting my HRA Rs. 13000, my company pays 16000 as rent to my landlord directly. Same amount reflets in my IT calcualtion sheet as PERK but not HRA.
Can i claim HRA rebate or some other kind of rebate. I am realizing that since 30%+ tax i am paying on this Perk
I have taken House Building Advance (HBA)for construction of house from my office (Govt Department)principal amount of which has already been paid and now I am paying interest @ Rs.4168/-per month (on HBA). I also took (3 year earlier) Home Loan from LICHFL for purchase a flat at the same station and paying EMI. I am receing house rent from the first house which was lent on rent and was indicated as income from house property while computing for income tax.
Sir, whther rebate will be allowed on interest paid against both the houses (HBA and EMI of LICHFL)for calculation of Income Tax. Please clarify, as my office is not considering rebate for both the interest paid by me though income from first house property (I am living in the flat) is taken for income tax calculation.
Myself and my spouse both are govt employees have purchased flat as joint owners and borrowed loan by my wife only and deduction of EMI is being made by the Bank through her individual account only and not thro joint account. She has given self declaration that she is not claiming tax exemption from her employer and in that case, shall I claim tax rebate on interest payout deducted through my wife’s account from my employer. If so, is there any limit upto which I can claim exemption on interest being the joint owner of the flat. Clarification is sought at the earliest to be of helpful to me for getting exemption this year itself. The flat has been completed one year back. In case of any further query u may rise, I am ready to part with you
I have purchased a plot for construction of new house, construction is not started yet and i haven’t takeen the full loan from the bank, can i take the income tax benefit on the interest paid by me.
As per IT, if one has two properties in his name then one is to be shown as Self occupied and another one is to shown as deemed rented though the another property is self occupied and deemed income is to be shown for IT purpose.
My question is, if One property is in his name and another property is in JOINT name and his name is first then will it considered as two property considering first name OR One property in each name considering second name of joint owner.
Please guide.
Is housing loan taken on a single property from a bank and as well from relatives is eligible from tax exemption? . If yes, what is the format of certificate required for interest paid on housing loan from relatives. Is handwritten statement will be sufficient?? Please advise
sir, my home loan was sanctioned in july 2008 and i got possession of the house in dec 2012. (3 years elapsed since loan was sanctioned. Please clarify if i am eligible to get interest element deducted from toal salary after the date of possession or it is restricted to Rs 30000 only
I have a plot in the name of my wife. I am getting a loan for construction on this as guranter and will repay the full EMI from myself. Will I be entitled to get exemption in IT Act from my salary ?
Following is the interest paid on the housing loan, competition of house is next month or in Apr-13
Can I claim any rebate under income tax for current year.
1-4-12 to 31-3-13- Rs.242622
1-4-11 to 31-3-12 -Rs.20093
Total Rs.262715/-