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)
Sir,
My query is if the property is in my mother’s name and emi is being paid by me as my mother is not working. Then in that case can i claim for tax benefits under section 80C & 24b.
Sir,
I book a flat in Jan 2013 and opted Home Loan from SBI , EMI also start from April 2013. But I will get the possion in the month May 2014. My question is can i get tax benfit on EMI paid by me till date.
Please confirm
Thanks
Sunil
Sir, I have a query regarding the housing loan. Myself and wife are co owners & co borrowers of the property. We are living in that house. We have paid 4lacs as interest in the year 2013-14. Full EMI is paid by my wife. How much can we get deduction under sec 24(b).Are both of us eligible for 1.5 lacs deduction individually
Hi,
If house is underconstrction how much can i cliam u/s 80c and sec 24 ( loan taken on 1-5-2010) what is tax implication .
Recently I have taken a loan for ICICI to purshcase a land at DLF for 30,00,000
I am not getting the income tax benefit(Sec 24) for the Interest I pay , since the bank says “it
is a land loan”
Can i show this property as a second property and can get the income tax benefit(for the interest
I pay )(since the interest is a loss).
My first property is rented up and is shown in the income tax books
Dear Sir,
I purchase new home on Dec-2012 and taken loan for same, my income tax declaration same claim of my home loan but till date my home not hand ver to me, and i live on home rent in same city, can i claim both Home loan and Home rent in my 2013-14 Income tax declaration, please suggest,
I have a doubt to be clarified on the following point : A flat was purchased in the name of both husband and wife by availing joint loan from the bank. Both are employed in Govt organisation and are income tax assesses. There is no sharing agreement between them in respect of repayment of principal and interest EMI. Now, the husband gives a declaration that his spouse though income tax assesse, is not willing to claim rebate on interest on housing loan and she gives no objection to her spouse in claiming 100 percent rebate on both interest and principal on housing loan. whether 100 per cent rebate can be allowed to the husband based on the self declration by the wife. or else in the absence of any sharing agreement, it has to be claimed by both of them equally. please clarify
Hi,
I had taken a home loan in may 2008 for under construction property. Construction was completed in 2011 and I was offered possession by authority in 2011. But I got the registry done in August 2013, as no development was there in that area. I didn’t take tax benefit till now as in my company, they asked for possession letter. I am neither living in that house nor that is let out. It is vacant.
My queries are
1) As section 24 says “acquisition OR construction is completed”. Can I take interest benefit from last year also (AY 2013-14) as construction was completed and I have offer of possession but myself by choice didn’t take possession.
2) If I take tax benefit for interest paid before possession (20% in each year for next 5 year), max limit is 150,000 or (150,000 for this year+20% of previous interest.).
3 ) In case, if property is let out, then there is no limit of 150,000. Can we still take benefit of interest paid this year+20% of interest before possession?
Thanks in advance.
Pankaj
dear sir,
i have 2 home loans running, 1 is for self occupied & other property which is not given on rent. in this situation can i get the tax benefit for the these 2 home loans? this two homes are in same city only.
plz reply.
I am residing at vileparle in rented house, near to my office at Bandra kurla complex & I have bought ready flat at thane.
Can I claim for HRA & home loan interest.
Dear Sir
I have purchased a plot on my wife and constructed a house but she is house wife not an earning member. The home loan is on both names where as i am paying complete EMI.
Question 1- Can I claim tax benefit u/s 80C.
Question 2- Can I Claim tax benefit u/s 24.
Hi
I have two home loans where both homes are given on rent. How much interest can I avail as IT exemption. Both these homes are jointly bought by me and my wife. currently we are staying in quarters offered by my wife’s employer. We are showing rent as our income. Please suggest
I have purchased a plot on my wife and my mother name in equal part and constructed a house but both are housewife not an earning member.The home loan is on her names where as i am paying complete EMI.
Question
1.Can i claim tax benefit under section 80C.
2.Can i claim tax benefit under section 24
With the help of home loan, we have built a new house on our land, – I am a co-applicant along with my mother. The total EMI amount is paid by me. But the land is in my mother name. Am I eligible for tax benefits ? Please reply…
I & My husband have taken a Housing loan Jointly .During the FY 2013-2014 Principle repayment is Rs 3,67,780 & Interest repayment is Rs 2,24,607.What will be the Tax benifit U/s 80 c & U/s 24 for both of us
Hello,
I have co-borrowed a home loan with my mother but im not a co-owner for the home. Can i claim tax exemption on the joint home loan since my mom does not claim this tax benefit ???
I am planning to take a home loan in Feb/Mar-14 which is going to be <25 Lacs.(Total Value of the property is 28 Lacs)
The possession of the house which is under construction now is Apr-2015.
What are the tax benefits that I can get in the coming year (Apr-14 to Mar-15) ?
Thanks in advance,
Charan
sir.
as posted and clarify regarding home loan what sort of agreement ( contents )to be entered on stamp paper of rs. 100/ will suffice? we have not mentioned percentage of holding of shares in agreement. now shall we enter in to simple agreement? the percentage are 60:40. we entered and registered the agreement in mat 2013 and possession taken on 27/01/2014. the loan instalment debited from my son account . the proportion of emi i transfer to his account. pl advice and guide. the contents of simple agreement , shall we both entitled to cliam tax benifit inthe proportion 60:40, hope quick reply. thanks mahesh sheth
hi
i have two home. one is given on rented. second one is under construction with housing loan. & i am living on rental basis with my parents.
Can i get the benefit of HRA against Rent Paid, 80 C for principal & Int. Benefit upto Rs. 1.50 Lacs.
Whether the interest paid for pre-construction periiod which is available in 5 installments after completion of construction is in additional to Rs. 1,50,000 or no condition it should exceed Rs. 1,50,000.
I have income from coaching classes rs
210000/- & I invest in ppf , insurance rs. 30000/- .
I want to know about professional tax? K ya muze professional tax bharna padega????
Kyu ki meri income non taxable hai.
please reply me by e mail.
Sir
I have taken a housing loan from SBI and my wife is guarantor .Can I apply for a certificate in favour of my wife for Income Tax deduction?
Hariprasad.P
Hi, I and my mother are co-owner of a new flat and also co-applicant for the housing loan on the same. This flat can be considered as deemed to be let-out as we stay in another flat for which I am the owner and also have a housing loan on that. I independently do the repayment of the loan on the current flat where we stay and the loan taken on the new flat. The loan on the new flat is only for 50% of the flat cost. The rest 50% of the flat cost was paid by my mother from her corpus to the builder. What I understand is I can claim both principal (but I have actually exhausted the 80C limit) and interest (without the upper limit of 1,50,000). Can my mother also claim the Principal repayment done under her 80C?
Sir,
I had purchased a duplex in 2012 by opting house loan which is occupied by me and home loan rebet was availed upto 2009. Now I purchased second flat by availing house loan for 20 years. Loan interest is 2.30 lacs in the year 2013-14. and more than 1 lac is principal amount. My EMI is Rs. 22200/-. The flat is on rental basis. How much tax rebet can be availed by me.
regards
V. Bajpai
I am residing in govt flat.I am also paying interest on HBA for another under construction building(flat).What ican avail income tax rebate on constructed flat?Pl. reply on my email id( nawalkishore_68@yahoo.co.in)
hi,
feb 2013 I am purchasing a third home on loan for my brother. Me and my brother are co applicant of the said property. I am already taken a home loan benefits from my previously purchased two home loans, first home that i am using and second to be let out, taking a benefits on 80c and 24(b). And third home loan also a let out property.
In this F.YEAR my 80c limit is full due to life insurance and principal of first home loan. my question is
1. What is the limit of tax benefits in sec 24(b)?
2. Can I take a second and third home loan interest benefit in sec 24(b)?
3. In IT any taking tax benefits from third homeloan?
please guide.
Sir,
I have two Flats in Pune and I am working in Mumbai. My family is living in pune in our own flat ( New interest paid is Rs 403000). Another house I have rented out @ 10000/Month from Jun-13. 2 months it was vacant. Yearly interest in R s 76714 only. I am declaring -ve income of rs -337000 and also showing interest as Rs 479000/- to take advantage of 150000. Is this is OK.
Dear Sir,
I have a house property in jaipur on loan where my parents resides, and i am staying at mumbai in rented house for which i received form my employer. so now can i claim both HRA and Interest on Home Loan in my ITR
Please give me suggestion.
can I get tax benefit on house renovation loan.
Dear Tax Guru,
I have applied for a Home loan to make house .But the property(land) is in my wife’s name who is an housewife.So i am only a co-borrower for the applied loan.But the loan has been granted entirely based on my salary income.So will i be eligible for tax exemption against the principal amount and the interest paid against EMI’s paid?.
Please sugest me on my mail ID. milty2812@yahoo.in
Thanks.
i had bought second home & occupied . first home given on rent. can i get tax benefit of deducting all interest paid for it.or
can i declare first home as second toget tax exemption
I have taken joint home loan in FY 2013-14 with my wife (main applicant) and property is registered on both of our name, However I am re-paying entire EMI from my salary. During investment proof submission, my company says “Only if the main applicant is the company employee, the exemption under this provision of income tax would be provided to the employee at such % of loan repayment specified”. In my case I have specified 100% lean repayment by me. Does it mean I may not given any tax benefit?
Sir, My question is I have taken the house building adavance from my company in a lower rate of interest. and paying the principle amount and interest every month. At the time of income tax calculation the company is taking the interest difference with SBI to company as perks and the amount is adding to my income and calculating the tax accordingly. The company is not giving the exemption or rebate for the amount which paid as interest per annum. Is it right or wrong as per Income tax rule.
thanks.
My husband has taken a home loan.I am a co-owner with him but the EMI is paid by him only. will I be entitled to avail of the tax benefits?
My Husband has purchased a flat in Chennai in his name. I have taken loan in my name and i am paying the loan for that property. Can I claim the tax benefits as the home loan in my name, inspite of property is in my Husband’s name ?
and What will be more beneficial from income tax point of view ?
Please suggest.
Thanks and regards
I and my mother are co-owner of a new flat and also co-applicant for the housing loan on the same. This flat can be considered as deemed to be let-out as we stay in another flat for which I am the owner and also have a housing loan on that. I independently do the repayment of the loan on the current flat where we stay and the loan taken on the new flat. The loan on the new flat is only for 50% of the flat cost. The rest 50% of the flat cost was paid by my mother from her corpus to the builder. What I understand is I can claim both principal (but I have actually exhausted the 80C limit) and interest (without the upper limit of 1,50,000). Can my mother also claim the Principal repayment done under her 80C?
i have home loan with sundaram bnp home. this year after aug’13 my home loan take over by sbi. how i produce provisional certificate this year. the sbi showing provivsional certicate amoutn is sep’13 to mar’14.
Sir,
I took a housing loan from central Govt., and I have to pay back the principal amount in 140 installments first and then the installments on interest amount will be fixed by the office and paid by me. Till now I have paid 70 installments of principal amount and had been getting notional tax benefit as well. As of now I have been transferred to another office where I have been refused tax rebate interest on housing loan by saying that since I am not paying interest amount I am not entitled to get the tax rebate on it. What does the rule say ? Kindly confirm who is right.
R. U. Choudhary,
I have purchased a plot on name of my wife and have taken loan of rs. 16 lakhs on my name co borrower. Can i take Income Tax Deduction ?
Hi Sir,
Me and my wife both are owner & co-owner of the flat. We have taken joint home loan from LIC. But EMI is deducting from my saving account. How can we both claim 50% income tax benefit. Lic is giving only one joint certificate.
I have purchased a home on name of my wife and have taken loan on my name. Can i take Income Tax Deduction ?
have purchased a home on name of my wife and have taken loan on my name. Can i take Income Tax Deduction ?
I have purchased a flat in LKO in my wife’s name and I want to take home loan in my name or jointly with my wife . My wife is a home maker. The cost of the property is about 36.0 Lacs
a.I want to take loan from bank for Rs. 20.0 Lacs for 10 years and rest from my own resources.
b. Can I claim the tax benefits as the home loan in my name, inspite of property is in my wife’s name ?
c. What will be more beneficial from income tax point of view ?
Please suggest.
Thanks and regards
I am staying in a rented flat in an apartment and availing HRA benefit. Now I have just bought new flat in the same apartment with loan from SBI.
If I will stay in the same rented flat and give my own flat on rent, can I get full HRA benefit as well as full tax deduction on interest paid(it is more than 4 lakhs) on loan. With this i may save 10K per month. There is a confusion as my owned property is in same locality where i will be staying on rent. I want to know actual income tax rules as i don’t want any harassment from IT deptt in future.
Please suggest.
Dear Sir,
I am requesting you to clarify the tax benifit on intrest componet against HBA rebate on two property.Details are follows:
01) I have one flat for which I am getting tax benifit up to 90,000.00 as per section 24 and this was rented.
02) I have purchaged a plot to construct a individual building by using bank loan for which I am paying 1,20,000.00 intrest yearly.presently I have not claimed the intrest component under section 24 to full avail the limit Rs 150000.00 along with the first property.Building construction not yet started but property registration completed on my name.
Hence,please advise me Can I get benifited the balance tax on intrest component up to 1.50lachs which is less claim by first property with the use of 2nd property.
Regards
S.DORABABU
WOODE FINANCIAL SERVICES.
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Hello sir, I have taken home loan with my brother. but deduction of loan amount is from my brothers account. Am I eligible for tax benefits? As per my Accountant I can get tax benefits but not currently, I need to claim in end of the year to tax department, is this right?
My house is in my Wife’s name , home loan is on name of both me and my wife , she is a house wife .
Since house is in her name i am not able to avial tax benefit .
will i get tax expemtion if i get Power of attorney for house
I applied for the home loan, in which wife is co-applicant.
house is in her name.
can i avail the text benefit u/s 24 and 80c