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 purchased a residential plot from a developer in instalment. Can I take the income tax benifit of my EMI?
Regards
Nirupam Chatterjee
Sir,
Property is in my wife name. we have taken a home loan where we both are the borrowers of the loan. Wife is home maker.
– Can i claim for income tax exemption ?
Please reply to my mail id.
Please respond….
Thanks a lot
My mother had availed housing loan, she was a house-wife. Now she is deceased. I am paying loan EMI. Can I claim exemption under Income Tax Act., for loan repayment?
Dear Sir ;
I have taken a home loan before 2.5 years for a flat. Recently I have sold the flat and repay the bank home loan. In that situation how much principal amount and interest amount can I get for saving purpose in current year?
Plz. reply.
Hello sir,
Sir, I am a Railway Employee and purchased a flat by dual mortgage by taking loan from Office and HDFC. Sir, for HBA form office i have paid all principal amount and not taken rebate on accrued Interest which is now being paid through my salary since April’2013. Simultaneously payment made against HDFC loan I have avail rebate on the Interest actually paid to HDFC.
In above circumstance kindly advise whether I can claim rebate on the Interest on actually being paid to my office through my salary after payment of principal amount as well as principal and Interest being paid to HDFC.
Kindly advise the policy/rule of Income Tax Dept. thereon.
Thanking you
I have a query which is like this
I have two houses and both are on rent.
For both the houses, home loans are still on and I am claiming tax benefit for both of them.
Now, if I take a third home loan and put the house on rent then do I get any tax benefit especially on interest component of the third home loan?
Kindly respond
Hello sir
We have a plot, which is registered in the name of my mother-in-law name.and we are living together in a rent house.
My question is
That me n my husband want to take home loan for the construction of house in that plot. Will we both get income tax advantage separately when owner of that plot is my mother-in-law.
My second question is, for taking income tax advantage in home loan if it is necessary we have to become owner of the plot. For getting ownership what will we do.please suggest
Thank you
Yashoda Sah
He ll o sir
I have a question
1- we have to a property (plot) which is register to my mother in law name. we are living in rent.
.Me n my husband is doing a gov job. And want to take a home loan jointly. Will we get advantage in income tax both for a house loan Separately.
2- if we have to become a owner of the Plot jointly(me n my husband) before getting Advantage in income tax then is it necessarily we have To do regestery of plot in our name.
Thank you
dear sir,
i have purchased a flat on my name (my wife is not co-owner). me and wife borrowed loan jointly. she is main borrower and i am Co-borrower in said loan. we are paying EMI’s from Joint bank account of us. we both are government employees. my questions are as follows :
1. can we both take tax benefit of Sec. 24 and 80C of Income tax.
2. in what ratio should we claim.
3. as i am sole owner of flat can she avail benefit in equal ratio or higher.
please reply.
Please reply to my posting done on 7.8.13.
Thanks
We have taken a loan for under construction property in December 2009. till now the property is under construction. Pls let me know whether we can calim the benefit of interest payment as deduction after receipt of completion certificate. Since this property has taken more than 3 years , how may years interest can be claimed and what wiould be the maximum limit of deduction allowed.
Property is in my wife’s name and home loan is in my name:
a. Can I claim the tax benefits as the home loan is in my name, inspite of property is in my wife’s name ?
b. If the property if let out, income from property shall be added to my wife or mine income?
Please respond.
Hi
I and my wife are co-owner of the house we recently bought; she is also co-applicant for the home loan. But I am paying the whole EMI for the loan. Will she be able to show the Interest Paid (24) and Principal Component (80C) to get tax benefit?
Thank you in advance for your advice.
Property is in my wife name. we have taken a home loan where we both are the borrowers of the loan. we have let out the said property. pls clarify ;
1. can we both take the tax benefit in our individual IT returns.
2. how should we show the rental income. i.e. in whose returns the income should we consider.
3. presently EMI is being paid from my bank account.
4. we can convert the ECS to our joint account if required.
Please reply to my mail id.
Thanks a lot
Sir, I am taken housing loan from CBI,Ajmer of Rs.9,20,000/- eight months ago for 10 years. Sir my interest I think near about Rs. 80,000/- annual and I paid Rs.12,500 per month as EMI. How much I take benefit from income tax and how? Please suggest me how much amount I can more take from bank so that I can reach upto the rebate of Income Tax
Property is in my wife’s name and home loan is in my name. My wife is a home maker.
a. Can I claim the tax benefits as the home loan is in my name, inspite of property is in my wife’s name ?
b. If I can claim the tax benefit, can I claim the refund while I file the returns next year ?
c. In my company they rejected stating property should also be in my name and hence i’m not getting the tax benefits as they deduct TDS. Is this correct ?
Please respond.
Being a co-applicant and wife of the owner am I elgible for obtaining dedcution on home loan interest ?
Hi,
We have taken a loan for under construction property in December 2009. till now the property is under construction. Pls let me know whether we can calim the benefit of interest payment as deduction after receipt of completion certificate. Since this property has taken more than 3 years , how may years interest can be claimed and what wiould be the maximum limit of deduction allowed.
Property is in my wife’s name and home loan is in my name. My wife is a home maker.
a. Can I claim the tax benefits as the home loan is in my name, inspite of property is in my wife’s name ?
b. If I can claim the tax benefit, can I claim the refund while I file the returns next year ?
c. In my company they rejected stating property should also be in my name and hence i’m not getting the tax benefits as they deduct TDS. Is this correct ?
Please respond.
Dear Sir,
I have two houses. From one i am getting rent and was purchased out of my own sources and i am not claiming any tax benefit.
from the other i am claiming interest and principal benefit amounting to rs. 1.5 lakha and 1.00 lakh respectively.
how these entries will be entered in itr 1 kindly advise.
pavan
Dear Sir,
I have a self occupied house.I’ve purchased another house which is under construction for which I’ve taken a home loan in 2012. This is my first home loan. I’ve not take any loan for the self occupied house.can i claim tax deduction on the interest and principal for assessment year 2013-2014. I’ve not received the possession of the second house yet.
Awaiting for a response.
thanks.
Sir I have taken Joint home loan(SBI SURAKSHIT HL) with my mother in Jan 2013. the property is on her name. We both are salaried persons. her income doesn’t come under tax slab. i have paid 8000/- as part of home loan interest till Apr 2013.
I want to know how much i can get tax rebate.
Dear Sir
I had a bank loan for a flat (in Navi Mumbai) in which I am living and now have purchased another flat which is under construction in Navi Mumbai. I am getting tax benefits on interest and principal of the flat I am living in. Can I also get tax benefit on the flat under cosntruction? I am paying the EMI of the flat under construction.
thank you.
shaban
HI.. PRESENTLY LIVING IN MY PARENTS HOUSE AND I HAVE PURCHASED NEW HOUSE ON MY NAME THROUGH HOME LOAN…CAN CLAM PAYMENT ON INTREST AND PRINCIPAL AMOUNT?
Dear Sir,
Me and my wife both have separate home loans for two different properties. In my flat she is not a co-owner and in her flat I am not a co-owner. However, in her home loan account I am a co-applicant and in my home loan account she is a co-applicant. We both pay interest on home loan more than 2.5 lacs every year. Is it possible that:
1. I claim a portion of her Home loan which is in excess of 1.5 lacs, as my 2nd home loan. For example, suppose her yearly interest is 2.5 lacs. She claims 1.5 lacs(max. limit) and I claim 1 lac as my 2nd home loan.
2. And vice-versa for her i.e. she claims a portion of my home loan in excess of 1.5 lacs claimed by me, as her 2nd home loan.
Thanks for your response.
Hello,
I had purchased a property last year. The property is registered solely in my name. The housing loan for the same has been taken with my father’s name as the main applicant and my name as the co-applicant. Will my father be able to claim the income tax benefit, given that he is not a co-owner of the property ?
Regards
Jagan
Dec-12 I have purchased aflat and taken loan from LICHFL. My wife’s name as co applicant and resigistredin our name. My wife do not have pan card and her salary is below the income tax limit. Housing loan EMI is paying from my bank account.Can I claim tax benefit 100% for principal and interest part for the financial year 2012-13. EMI is 25568/- month.
Thank you in advanc.
Hi,
I had taken a home loan of Rs. 4800000 in the year 2008 for a property in Ghaziabad. I am currently living in Bangalore in a rented accomodation. How much income tax rebate can i claim on interest and principal paid against the home loan?
Thanks a ton in advance.
Vinay
I have taken a joint home loan but the house is on my single name, how can i claim deduction under house property and under section 80C
Dear sir,
MY first disbursement starts in Sept 2010.. & till march 2011 I paid 52000 as pre EMI. I got possession in in Nov 11. Till the time of from April 11 to Nov 11 I paid @100000 as interest.
Question=
1. So If I have to take the facility of availing the Pre EMI in 5 equal instalment in coming 5 financial years from . then the amount will be 52000/5 or (52000+100000)/5?
2. This facility can be taken from FY 12-13 or from 11-12 ?
Hi,
I have a housing loan in which my mom is co-applicant. The property is in my mom’s name, and not in my name. Am I eligible for tax benefit, in this case ?
Any reply will be appreciated, because we need to submit Form16 by end of this month…
Thank you very much
Arun PC
Dear Sir,
I presently live in house which has been transfered to me by inheritance after my father’s death. Now I would like to purchase house at other city for that I am taking housing loan. Whether I am eligible to get all home loan benefits for income tax?
I had purchased the home and i amd my mom are the co-applicant, my wife is not claming the tax deduction , can i claim the tax deduction
I HAVE HOME LOAN RS.16 LACS, I PAID PRE EMI INTEREST RS.75000/- AFTER THAT I PAID MY EMI AFTER CONSTRUCTION COMPLETED F.Y.11-12, F.Y.11-12 MY INTEREST ON HOUSING LOAN RS. 150000/- AND PRINCIPAL IS RS. 75000/- SO CAN I TAKE BENEFIT OF DEDUCTION OF PRE EMI INTEREST.
i had a home and the balance amount to be paid is 2.50 lakhs.i want to close the same and to avail another loan for rupees 10 lakhs.i had 14 years service.my monthly salary is 95000/-rupees. i want to know whether i can claim income tax exemption for the new house loan.
sir
we have purchased a house.registry is of my mother`s name.in bank my mother is applicant & my father is co-applcant.all the EMI is going to paid by my father.So the query is ,is my father can get intax rebet.
pls reply
I am the central government employee. My eligibility from the salary for housing loan is approximately 23 -24 Lakhs. My wife has some business and her annual income is approximately 2.0 lakhs and her eligibility for housing loan is six lakhs ( combined eligibility is 30 Lacs)
I am planing to purchase resale residential house for which i need 30 lac housing loan from the bank and bank is ready for sanctioning loan of 30 Lac.
My question is
1) For benefit of income tax rebate to both (Myself & wife), Kindly intimate whether I have to purchase the house in both the name.
2) While purchasing of above said residential house/property, whether ratio of 80:20 for 24 Lac & 6 Lac should be maintained to claim income tax rebate for both.
3) If the purchase will be only in my name, whether both of us can avail the Income tax benefit.
4) Any further advice in this regard is welcomed.
With kind regards,
RS Bhandarkar
HI,I WANT TAKE A HOME LAON BUT HOME NOT MY NAME THAT I WOULD GET ENTITLEMENT OF TAX REBATE.
I have started to repay my Home loan wherein possession of the house has been postponed by a year. What is my entitlement of Tax rebate.
Hi,
Am i eligible for tax benefit if I take loan against property for
renovation purpose.
I started home loan in 2011 and I got the possession in December 2012. I paid around 70,000 RS as an interest between Apr 2012 and Dec 2012 and paid around 35,000 RS as an interest between Dec 2012 and March 2013. How much I can display in section 24 while filing the income tax?
Hi,
I understand that if the possession is delayed beyond 3 years, then we can claim only 30K as tax rebate of the home loan for a “self occupied property”. Does the same rule apply in case of second home where you claim a “leased out property” ?
Or can i claim the entire interest amount for the home loan minus the rent realized?
Please suggest.
Thanks
i have puschased a home and this is under construction and i will get possession on october-2013. please let me know what are the tax benifits i will get. i have taken the house loan on this. shall i get the tax benifits for which i paid in this finanacial year(from 1st April-2013-to-31st of march-,
2014).
Thanks and Regards
Umesh Prasad Sah
DEAR SIR, THE CONCEPT TO CLAIM INTEREST AND REPAYMENT OF HOUSING LOAN BY JOINT OWNER INDIVIDUALLY RS.1.50 LAKH AND 1.00 LAKH IS SEEMS NOT CORRECT. IT SHOULD BE RESTRICTED TO THE EXTENT OF ABOVE FIGURE AND EACH CO-OWNER CAN CLAIM THE SAME IN THEIR SHARE RATIO. IF IT IS NOT CORRECT THEN PLEASE REPLY ME. THE HOUSE IS ONE AND BOTH HOW THE BOTH CO OWNER CAN CLAIM FULL AMOUNT IN THEIR INCOME TAX RETURN. ASSUMING THAT THERE ARE 6 CO OWNERS OF PROPERTY AND THEY HAVE TAKEN LOAN FOR ONE HOUSE HOW THEY CAN CLAIM REBATE FOR FULL AMOUNT IN THEIR INCOME TAX RETURN. PLEASE CLARIFY THE POSITION AND OBLIGE.
dear sir,
i have taken a home loan with my mom and me… my mom is first applicant and second one is I. The property is owned by my mother. She does not have any income. I pay the whole EMI. how will i be able to get the incometax exemption.
dear sir,
i have taken a home loan with my mom and me… my mom is first applicant and second one is I. The property is owned by my mother. She does not have any income. I pay the whole EMI. how will i be able to get the incometax exemption.
I HAVE DESTROYED MY RESIDENCE HOUSE AND RECONSTRUCT IT WITH NEW PLAN FROM LOCAL AUTHORITY CAN I GATE THE BENEFIT OF HOUSING LOAN INTEREST & PRINCIPAL U/S. 24 AND 80 OF INCOME TAX. THE HOUSE IS IN THE NAME OF MY WIFE AS PER SALES DEED IF LOAN APPROVED IN BOTH NAME THEN I HAVE ALSO TAKE SAME BENEFIT IF 50% E.M.I PAID BY ME?. WE BOTH RESIDING IN THIS HOUSE.
PLEASE REPLAY ME AT THE EARLIEST.
I have a house in Chennai,which is self occupied and I have cleared the loan last year.I have one flat gifted by my father in a town in Andhra pradesh.He is retired and stays in that house for which I have neither taken any loan ,nor i get any income from the house.Now i plan to buy another house in chennai to maximize the tax benefits.What amount am i eligible for the income tax benefits for this house under sec 24 and 80c.I would like to be a co-borrower and a Co-owner along with my wife, who is also employed.May be we plan to clear the loan in the ratio of 3:1.We plan to rent it out after purchase.
Also, i would like to gift the existing house in chennai to my wife.We continue to stay there.Can i claim the HRA benefit also, apart from benefits under sec 24 and 80c as described above,for this house by showing rent receipts in my wife’s name?
i have a home loan from SBI in my single name and getting tax deduction benefits, now I like to take another home loan jointly with my wife in another city. I like to know whether I shall get all deductions/benefits from Income Tax or my wife will be only benefited from this Joint loan. I like to get good advice from you Sir.
I got possession of house in Feb13, so to get the rebate from benefits under 24(b) do I have to submit the revise return for 2012-13 or I can claim rebate on tax benefits in this year return. Pl advise