Income Tax Benefits on Home Loan (Section 24 of Income Tax Act)

Home is where my Heart is!!  It is just a saying but if you understand the meaning of it then its much more than a saying. Owned house is what one can dreamt of. It is one of biggest investment in our life. This can be possible through the housing loan. Section 24 of Income tax Act also provides tax benefits on home loan by way of rebate and interest deductions.

What is Home loan

Basically home loan or the mortgage is just a funding for your new house. Banks disburse loan to the owner of the house with some criteria. Home loan is composed of two parts.

1) Principle payment

2) Interest.

Banks disburse full amount of loan by way of cheque in the name of Builder after calculating home loan eligibility criteria or any concerned party. That amount assessee has to repay every month by way EMI’s i.e. Equated Monthly Installments. You also need to know the list of documents for home loan

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How Principle Repayment towards Home Loan helps to reduce Income Tax?

Income tax has Sec 80 C for home loan principal repayment deduction. It reads assessee investing in any of the avenues prescribed in the section then he is eligible for the deduction of a maximum amount of Rs. 100000. It includes investment in PPF, PF, LIC, ELSS and such instruments. It further includes principle repayment of home loan

Also Read: Best Tax Saving Strategies for Salaried Professional

Conditions for claiming deduction under 80C are:

1)      This principle repayment is a direct deduction from your total income for that assessment year up to Rs. 100000.

2)     If assessee already invested in other avenues like PPF or etc then the sum total should not exceed Rs.100000.

3)     Principle repayment considered for deduction only if the loan is taken for self occupied house. Deduction in respect of principle repayment can be availed if the loan is taken for the house which is not self occupied and assessee staying in different city due to work

Explaining Section 24 of Income Tax Act and Deduction under this Section

  • Where the property has been acquired, constructed, repaired , renewed with borrowed capital, the amount of interest payable on such capital is allowed as deduction under Section 24 of Income Tax Act
  • The amount of interest payable yearly should be calculated separately and claimed as a deduction every year. So it is immaterial whether the interest is actually paid or not paid during the year.
  • Penal interest on housing loan shall not be allowed as deduction.
  • If the purchase price of the property is paid in installments with interest, the interest portion of the installment is an allowable deduction under Section 24.
  • If the fresh loan has been raised to repay the original loan and the new loan has been used only for the purpose of repaying the original loan then the interest paid on such fresh loan is also allowed as deduction

Interest attributable to the period prior to completion of construction:

In some cases it may happen loan is taken earlier and acquisition or completion of construction takes place in later year. So there is interest payable during the period of loan taken and completion of construction or actual acquisition, in such cases interest paid or payable for the period prior to the previous year in which the property is acquired or constructed will be aggregated and allowed in five successive financial years starting from the year in which the acquisition or construction is completed.

For example: Mr A took loan of Rs.800000 on 01-04-2009 from a bank for the construction of a house on piece of a land he owns in Mumbai. The loan carries an interest @10% pa. The construction is completed on 15-06-2011. The entire loan is still outstanding.

In this case interest allowable for deduction for A.Y.2012-13 will be

1) Interest for the P.Y.2011-12 on Rs.800000 @ 10%                    80000

2) Interest for the pre-construction period i.e. from

01-04-2009 to 31-03-2011 (1/5th of Rs.160000)                          32000

————

Total interest allowable                                                                112000

=======

Ceiling on the amount of interest allowable Under Section 24 of Income Tax Act

 1)      If the property is acquired or constructed with the capital borrowed on or after 01-04-1999 and such acquisition or construction is completed within 3 years of the end of the financial year in which capital was borrowed then the actual interest payable is allowed as deduction subject to maximum Rs. 150000.

2)     In any other case interest up to maximum Rs.30000 is deductible.

3)     This ceiling of Rs.150000/30000 is only in case the property is self occupied but there is no limit on deduction of interest if the property is let out.

Also Read: How to Save Long Term Capital Gain on Property

Claiming Income Tax Benefits on Home Loan and HRA benefits together

  • If assessee has taken loan for the purchase of home in which he is residing then he is not entitled to HRA benefits.
  • If assessee having a house in one city for which he has taken a home loan and he is residing in another city due to work or similar reason then the assessee is eligible to avail benefits of HRA as well as benefits of housing loan.

Property owned by co-owners:

 It may happen that a house is owned by two persons in family. In that case home loan benefits under income tax are applicable in proportion to the ownership structure. For example if  the husband and wife owns house in 50:50 ratio then benefits of the interest under Section 24 b as well as the principle payments under Section 80C are also shared in the same proportion. In this case both the husband and wife can claim interest deduction of Rs.150000/30000 and repayment up to Rs.100000 is also to be separately considered

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Comments

  1. PKMishra says

    The property is in my father’s name who is a pensioner. I have taken loan from LIC for construction of house where my father is a co borrower. I am the only son. Who can avail the income tax benefit ?

    PKM

  2. Vinod says

    My friend is having 2 houses. one in panvel and one given to him by the company in mumbai. Since the possession of panvel house my friend has been claiming regular tax rebates on principal and interest by submitting all relevant documents.

    However all of a sudden his employer has stopped giving him rebate on the grounds that his panvel house has been rent out. my friend has provided his company all the evidence that his panvel house has not been rented.

    Please advise whether my friend can initiate a legal case against his company and if yes then in which court of law.

  3. A says

    Hi Priya,
    Can you please guide me about Income tax reclamation calculated in case of owning a house but staying in a rented house in same city.Owned house is vacated though and there is no Interest amount on loan which I can show this year.
    I had claimed HRA(for time period before having possession) and interest+principal amount(After having possession) last year but can I claim “HRA only” this year as there is no Interest amount?

  4. esha colaco says

    I have claimed deduction under section 54F for investment in new house property purchased in A.Y. 2011-2012. Housing loan is also availed to buy the house property. Can I claim deduction under section 24 in respect of interest paid on Housing loan in subsequent years.

  5. Neha says

    we take a home loan on the name of my husband and myself if we registered the flat on my name can my husband get tax rebateas the installment deduct from my husband’s salary

  6. Kunal Malhotra says

    You can only Claim 1/5 of this year interest in next five previous year respectively.

  7. Kunal Malhotra says

    Yes sir you are only eligible for claiming IT rebate on interest of Rs. 1,50,000 (max. limit) in the FY 2012-13. In case you receive the rent from your house property on which you pay interest then there is no limit for claiming Deduction u/sec 24(1) of Income Tax Act, 1961.

  8. Kunal Malhotra says

    In your Case, Stipend given by your employer is not an income. There must be relationship of employee and employer to taxed your income under the head salary.

  9. Kunal Malhotra says

    I have purchased house in 2nd Feb,2006 by taking loan from ICICI Bank of Rs.8 Lakhs Now outstanding balance of loan is Rs. 75000 and i transferred that loan to HDFC and also take another top up loan of 7 Lakhs on it. In loan documents of 7 lacs it is not specified that i have taken loan for renovation or construction of house property. Am I eligible assessee for claiming Deduction u/s 24(1) of interest on 75000 loan as well as 7 lakhs Loan?? What is your reply if it is mentioned in 7 Lakhs loan document that i have taken loan for construction or renovation??

  10. Kunal Malhotra says

    If the Loan EMI is deducted from your Bank Account then you are eligible to take tax deduction U/Sec 24(1) of Income Tax Act 1961.

  11. S K Das says

    I have bought a flat at kolkata from Army Welfare Housing Board (AWHB), whose Head Office is at New Delhi. I took a housing loan of Rs. 25,00,000 in 2009 for which I have paid Rs. 200,000 as interest and Rs. 90,000 as principal in FY 2012-13. On completion of construction, AWHB gave me possession letter on 28 Mar 13 at New Delhi after signing builder-buyer agreement. After one week, I went to Kolkata and took over the flat on 10 Apr 13. My question is whether I can claim IT rebate on interest of Rs. 1,50,000 (max. limit) in the FY 2012-13, as I got possession letter after construction of my house in FY 2012-13.

  12. sripal reddy says

    sir i have file the income tax return with total income 21000 for the a.y 2013-14 ….just to learn filling process …..am article student …should i file return every year plz tell me any one of u

  13. varma says

    Hello,
    My father has a housing loan, after retirement of my father can i claim the repayment of loan in tax deductions, as he is not having any other sources of income.

  14. Payal Singh says

    Hello,
    I have taken loan of rs. 21.50 Lac from my father to repay the loan and i m paying interest to my Father @ 10%.whether i can claim this as a deduction and my both house property is let out property.

    Regards,
    Payal.

  15. bhailu says

    Hi,

    I am having two houses both purchased on loan and EMI is being paid by me; have following queries:

    1. Do I need need to pay wealth tax on them?
    2. I can gift one of the house to my spouse/mother to reduce the tax burden while they the loan is still on?
    3. Can I still pay the EMI post gifting the house? Can I claim the EMI in tax return?

    Pl. help.

    thanks,

  16. AMIT SHARMA says

    I have taken loan from bank against property loan but construction will be completed in 2015.

    So, i can claim interest in u/s 24 as well as principal amount in sec 80c for the F.Y.-2013-14.

    Pl. suggest

    thanx
    Amit Sharma

  17. rajiv kulshrestha says

    Hello
    We are living in Delhi and my my wife took a bank loan for a another house in Agra in jan 2010 and we got the possession in dec 2012.we paid EMI regularly since 2010.Can i get tax benifit since 2010.The house at Agra is not rented out.Is any notional income is taxable from the Agra house and how is will be calculated.Pl guide me.
    Sincere thanks in advance .

  18. says

    I got this web site from my pal who shared with me concerning this site and at the moment this time I am visiting this web
    site and reading very informative articles at this time.

  19. Jayesh Soni says

    Dear sir,

    I am co-borrower of home loan with my father. Property is on my father’s name.

    And the amount of loan premium and interest deducted from my bank account.

    In this case, can i shown this deducted amount 100% in income tax saving.

  20. says

    As far as I’m concerned, there’s no point getting out of bed for less than a grand, so this doesn’t look as though it’s worth the hassle in my eyes.

  21. pramod Kolat says

    Hello,
    I hv booked a flat of Rs.20L and taken a loan of 15L. from Jan 2012 my EMI is started. Out of 15L, bank has disbursed 13L i.e out of 20L loan 18L is paid to builder. can i avail the benefit of TAX and if yes under which section. Kindly guide

  22. pardeep sharma says

    Dear Priya

    i borrow a house in 2011 and my mother is house owner and possession letter of house also named of my mother. after that i took home loan with my elder brother and mother in joint income. so we all joint applicant of home loan. in which my elder brother is applicant and i am co applicant.
    i want benefits on income tax because i am paying monthly installments of home loan.
    so kindly tell me how i got benefits in income tax .

  23. says

    Hi

    Thanks for this wonderful and detailed post.

    I had a query that if the Wife purchased a property and the repayment is being done by the husband, would the husband get any benefit of the above mentioned sections ?

  24. Paramjit says

    I took home loan along with my wife who is also a working person. We were joint borrowers. Ownership percentage was not mentioned anywhere. The EMI is paid from my salary only. However, my salary account is a joint account; my wife’s name is included there. Can both of us avail income tax rebate? If yes, in what percentage? Does she have to deposit money as her share of the EMI to this joint account? Or simply her name in the joint account where my salary is credited and wherefrom the EMI is paid enables her to have the rebate? Can we take the rebate in 75:25 or 60:40 ratio? Shall we have to prepare a legal agreement in this regard? Plz reply.

  25. Vipin Bhardwaj says

    Dear Priya,

    Thanks for a well written article that clearly explains HRA and Home Loan benefits.

    I myself have availed a home loan on a ready-to-move-in property but it is another city, i am showing it as rented-out accomodation, while i have rented a house in the city where i am working.

    My employer have asked me to claim either HRA or the Home Loan interest component stating that there is a minimal distance requirement of 100kms. Is it so?

    Kindly help in strengthening my claim.
    Would highly appreciate if i can get an email from your side on same, so that i can forward it to them.

    Thanks,

  26. R Purushtohama says

    Dear Sir,

    1. I stayed in rented premises from apr12 to sep12 – can i claim deduction of hra from apr 12 to sep 12

    2. I have purchased housed staying from oct 12 to march 13 , can i claim the interest on housing loan and housing loan principal payment from oct to mar 12.

    Please clarify the deduction part and the interst on loan limit and prinicipal payment limit.

    Regads,
    R Purushothama

  27. Tarun says

    I work in Bangalore and live in a rented accomodation in Bangalore. I have taken posession of my own home in Bangalore in Jan 2013. I plan to continue living in the rented accomodation. I have paid a total of 5 Lakh pre possession interest for this home. My question is … Can I avail tax benefits under HRA as well as the preEMI (5 equal installments of 1 lakh each) for the next 5 years?

  28. kuljit says

    I want to ask that I have taken a hb loan from LIC(HF) where the loan is sanctioned in my name & my wife. The registry of the home is in the name of my wife & me & my wife is a house wife & she has no income. please write me can i claim full tax benefits. Reply me soon

  29. kuljit says

    I have taken a hb loan from LICHF where the loan is sanctioned in my name & my wife The registry of the home is in the name of my wife & me & my wife is a house wife & she has no income. please write me can i claim full tax benefits.

  30. says

    Sir I purchased a house near porur.The house is booked in my name.I told the bankers for joint account with my wife.But i told to claim EMI from my wife salary.Can we both claim tax benefit? or Only my wife can claim tax benefit? Pls reply me as i got Loan from LIC of India.

  31. mahendra bhurat says

    I have taken the loan from my wife for housing purposes and paying the house rent in MUMBAI for the another house.
    I am presently posted at VAPI.
    Can I claim HRA benefits and Interest paid RS 150000

  32. s.n.lalitha says

    The loan sanctioned to me is 30.00 lakhs to purchase a flat which is under construction.
    I have taken 2 instalments of 11.00 lakh each in may 2012 and november 2012 respectively. The flat may be completed in 2014. Instalment is not yet started.
    Can I take interest exemption for income tax calculation?

  33. Veebee says

    can you help with the tax position on the below status :
    mr A has a property in mumbai – possession was in Sep’11,but was not occupied till Apr’12 as the same was not being occupied due to interiors happening in the house.Between the same period Mr A was staying on rent.Can the below work out
    Mr A claims the house property as “Deemed to be LOP” & not as Self occupied property in Apr’12-Mar’13 & claim interest on loan in totality.

  34. Abhishek Mittal says

    I have one property in Jamnagar under my name (freehold property) and have recently invested in second under construction property in joint name with my wife. Pocession for the under construction property will be completed after 48 months and have taken loan from HDFC. Can you tell me income tax benefit that i can avail in my return for this new under construction property?

  35. M Gupta says

    I bought a property for 20 Lakhs five years back So far paid 10 lakhs interest on house loan. Now I’m selling the property for 30 Lakhs. Will it attract any capital gain tax?
    Thanks.
    M Gupta

  36. Naveed Arfat says

    I fully paid my home loan in Oct’2012 by doing principal prepayment of 5 lakhs.

    so should i will be getting tax rebate of 1 lakh rupees for next 5 year under section 80 C.

    Regards,
    Naveed Arfat

  37. Ashok says

    I have taken a loan of Rs.40 lakhs from Nationalised Bank but my wife is a co-borrower in the above loan also have her name in the property. Her salary is very less than me Can I give full EMI to bank and take the Incme Tax Benefits . This is my second house and I have given this House on Rent . You suggest me immediately Can I get full Income Tax benefits or divide into 50%.

  38. Nagabhushan says

    I and my wife jointly availed home loan from a bank. My salary is less than my wife’s salary and I am not using the home loan benefits for my Income Tax Returns. Can my wife use house loan fully for the benefit of Income Tax Exemptions. If so, please let me know under which section can we use these benefit.

    Nagabhushana

  39. Sandeep says

    Please help me out in clarifying my concerns related to home loan.

    1) Have running loan on 2 properties- 1 in Ghaziabad & 2nd in Delhi.
    2) Possession of both the properties has been taken recently in Nov. – Dec. 2012.
    3) Property in Delhi is not in livable condition.
    4) Residing in a rented house in Delhi.
    5) Working in Noida.

    Now considering the above facts, my concern related to availing HRA & benefit of tax on principal, interest paying for both the properties are:
    1) Can I avail HRA from April 2012 till Dec. 2012 i.e. till the time I got possession of Ghaziabad property?
    2) Can I avail deduction of total principal paid for both the properties (Delhi+Ghaziabad) under section 80C? with a limit of 100000.
    3) Can I avail deduction of total interest paid for both the properties (Delhi+Ghaziabad) under section 24? And is there any limit on the interest paid?
    4) How the deduction for the interest paid before April 2012 on these 2 properties can be availed & under which section this amount can be.

    Thanks,
    Sandeep.

  40. Jeevitha says

    Hello Priya,

    My parent’s got a housing loan from SBI in 2002, the loan and the property is in my mother’s name.. Currently they both were ill and unable to pay the loan. Currently I am repaying the loan.. Can I able to get the tax exemption for the same.

  41. parvesh sehgal says

    i have purchased a plot in the name of myself and future planning is for joint housing loan me and my wife. but in my knowledge my wife can not claim under section 24. how can she eligible whether any affidavit or any solution.

    thanks

  42. meenamadhuri says

    if i take loan for the purpose of shop construction can i show this principle amount under deductions u/s 80C

  43. jaibind says

    i have purchase a flat for self occupied in aug. 2012 for which i took a home loan and since the month of September i am paying the EMI on the loan taken, i got possession on 21st march 2012.
    my query is that should i eligible to claim interest amount paid on home loan till the possession of property after dividing the interest amt. by 5 up to five successive year from the A. Y. 2012 and onward and also tell me that whether i can claim from HRA the interest amount payable after getting possession of the property till the repayment of loan amount in every A.S. year.

    jaibind sahu

  44. Pradeep says

    Hi Priya,
    I am planning to buy my father’s house. Will I get a home loan from the banks to buy the house?
    Another qn is if my father gifts his house to me and I take a home loan to construct another floor on the same house, what are the tax exemption laws/rules here?

    last but not the least, awesome blog. :)

    -Pradeep.

  45. Ameya says

    Hello Priya,
    Pl. Guide me in below situation:
    Propery Owner – My Mother
    Loan Borrower – Myself with co applicant as my Mother.
    EMI – Paid by me.
    Can my mother claim income tax benefit for Principal & Interest components?

  46. Partha says

    Hi Priya,

    Thanks for your artcile. If the pre-construction interest total is say Rs. 6 L, then dividing it in 5 instalments the amount comes to Rs. 1.2 L per instalment in each of the subsequent 5 FY-s. If the property in question happens to be the 2nd property for me, then I hope there is no limit (1.5 L) for claiming. So if in this FY, for this 2nd property, the actual interest paid is Rs. 1.68 L, then I should be able to claim Rs. (1.2 + 1.68)L = Rs. 2.88 L on that FY for that 2nd property. Pls confirm.

  47. shubham says

    Hi Priya;
    Such a simple, crisp & clear article it is. i want one clarity.

    I have bought one underconstruction flat in 2010 in Mumbai & registry,stamp duty is also done. but now due to my job change, I had to relocate to Delhi where I am staying on rent. Since, My property is in mumbai and not yet get the possession but I am paying interest + principle (EMI). Please suggest can I get a tax benefit of both on EMI & HRA (in Delhi) or I will have to claim paid interest for successive years

  48. Avinash says

    Hi Priya\NineMillionDollars
    I booked home in mar,11 . I am the owner and my wife is co-owner. I am the borrower and my wife is co-borrower in the home loan. The emi is being paid from my wife’s salary account ( not a joint account ) as her account was the same as the homeloan bank. Till Novemeber I was paying pre-emi but from Decemeber it’s full emi will be paid. The IT certificate issued from bank shows the Pre-Emi interest around 2 lacs. projected interest around 1.28 lacs and projected principle around 17000. My Queries are
    1) Can i avail the tax benefit alone ( 100% ) as tax is being deducted more from my salary being higher than my wife . There is nothing mentioned like ownership percentage in the house agreement or in the home loan agreement
    2 ) Possesion is in January ,13 so will the pre-emi interest will be added to normal interest portion or do I have to claim that 2 lacs in 5 successive installments ?
    I shall be really thankful to your reply
    Thanks,
    Avinash

  49. Kanwaldeep Singh says

    Dear Concern,
    Myself owned a property build by pvt builder and gone up with clp plan as well as taken a Home loan from nationalized bank against the property . Can i get the exemption of Income tax on interest paid towards the principal amount as well as HRA (House rent allowance) as both the property are in different states (haryana and delhi) ? Rgds Kanwal Deep

  50. Abhi says

    Hi Priya,

    At the onset please accept me sincere gratitude for writing such a simple article on a complex subject. Kudoos to your efforts.

    Moreover, I’ve a piculiar question and hope you can give some kind of solution

    I purchased a home in March 2009 with 60% loan & 40% self contribution. During the course of construction of home i’d paid the the EMI in full for a fully disbursed loan (though the loan was disbursed in constuction linked installments). Today after possesion i’m in position to pay my loan in full.

    My question is should i fully pay my loan? if yes will i be still able to claim the interest benifit in 5 equal installment in next 5 financial years.

    Request your reply

  51. shivani says

    Hi,
    I bought a house in 2010 and got possession in year 2012. I want to take interest rebate benefit on this property in this year but probably i will sell if before 5 years.
    So in that case, if I take tax rebate on interest amount only(u/s 24), do i need to repay that as well if i sell in next 2-3 years?

  52. shubham says

    I have bought one underconstruction flat in Mumbai but now due to my job change, I had to relocate to Delhi where I am staying on rent. Since, My property is in mumbai and not yet get the possession but I am paying interest (EMI). Please suggest can I get a tax benefit of both on EMI & HRA (in Delhi)?

  53. Nine Million Dollars says

    You would get a maximum tax deduction of Rs 100000 against principal payment and Rs 150000 for the interest paid in the EMI

  54. jitu says

    Hi,
    Thanks for your reply,

    Does it mean i can claim tax benefit for loan interst and principal paid differently.

    And suppose i have paid aroun 1,00,000 to my principle amount, can i get benefit of that?

  55. Shankar says

    Good Effort to educate people. Keep up the good work. I need some clarification. In the example, you have shown principal as not being paid during construction period.

    1. What happens when principal is also being repaid along with Interest as EMI during construction period.

    2. In my case, the loan has been taken in 2011-12 and EMI incl. principal has started in 2011-12 and flat will be handed over in 2012-13. So can I claim full interest payable benefit for the year 2011-12 or it has to be phased for 5 years

    Shankar

  56. MANOJ SARKAR says

    I have taken a hb loan from HDFC where the loan is sanctioned in my name & my wife is there is a co-applicant, but the registry of the home is in the name of my wife & she is a house wife & she has no income. please write me can i claim tax benefits.

  57. Nine Million Dollars says

    Your tax deduction is based on the amount of interest payment and principal amount in your EMI. You can get this schedule from your bank. Interest payment and principal payments totals to your monthly EMI. Interest payments have different taxation affect and principal paid is treated differently according to tax laws

    Nine Million Dollars

  58. jitu says

    Hi,
    i have took a 21,00,000 loan to purchase flat, My monthly EMI is 21000,
    How much tax benifit i will get and in which section….

  59. manish says

    interest for pre construction period which is divided in five installment and yearly interest after acquisition will together restricted to total celing of Rs 150000 Else Interest for pre construction will be allowed above the ceiling of Rs 150000

  60. PVRMRAO says

    I AM HAVING HOMELOAN FROM LICHFL. SHORTLY I AM RETIRING FROM SERVICE. MY INCOME THROUGH PENSION WILL BE SUFFICIENT TO PAY EMI AFTER RETIRING. I AM STAYING IN THE HOUSE FOR WHICH LOAN TAKEN. CAN I GET SEC 24 BENEFIT upto Rs 150000 EVEN AFTER RETIREMENT AS I WILL NOT BE GETTING ANY HRA AND INCOME SOURCE IS THROUGH PENSION

  61. Dhananjay says

    I have taken Mortage Loan from HDFC bank & puchsed Shop. Can I take exeption benifit of intrest paid anaist Mortage loan.
    Pls advice.

  62. jacob thomas says

    i am paying an interest of 250000 towards my housing loan which i have taken jointly with my wife who is having a 50% share in the property. our repayment is also 50 % each. but my wife’s employer is giving the deduction of 125000 but gives only 75000 says that the total deduction is maximum 150000 for one house. we tried our level best to explain to them with the sections etc. but all went dumb. the employer is a degree college and so many CAs working as lectures and professors there! since last two years they are giving a deduction of only 75000/-. i filed for refund but i don’t know when will get refund. any body can guide me to whom i should approach to get the maximum deduction through the employer itself. whether the AOs can help in this matter. pls help. tjvirar@gmail.com

  63. Ram says

    Hi,

    My name is Ramprakash, working for a software company. I need a favour from you.

    I had taken a home loan putting my dad as co-applicant but the land is registered on my dad’s name. In this scenario, am i elligible to claim the incame tax for the home loan. When i submitted the document for the tax claim, my documnet got rejected because of this reason. It would be very helpful if you can justify this.

    Thanks in advance.

    Regards,
    Ram

  64. says

    “Priya, you have mentioned that assessee having house in one city (on home loan) and residing in another city (on rent) can claim tax benefit and HRA benefit. I have bought one house on loan and it is currently under construction. I am currently staying in another house on rent but in the same city. In this case will i be eligible for tax benefits on home loan pus the HRA benefit?”

  65. Shashidhar says

    Hi Priya,

    I have a home loan on my 3 floor building of which ground floor is rented out for Rs 6000. We are staying in 2nd and 3rd floor duplex. Can I show this rental income as let put property for Income tax deuction and hom much interest can we claim. Both me and my wife are working and home is registered in both of our names. we contribute 50% each to home loan repayment.

    Thanks for your advice

  66. priya shah says

    Hi Prabhu R M,
    you can claim the interest of prior years. Only interest due in this year only be claimed and deducted from your income. If you had filed your return and thereby claiming loss from the House property that loss you would have able to carry forward and get set off in this year but if you haven’t filed your returns then the loss also you can not set off.

  67. priya shah says

    Hi Prabhas Ghosh,
    You cam very well claim the deduction in this year for the interest payment since Apr’12. For the previous interest you can claim interest for prior period provision and can take deduction in five equal installments.
    and for HRA also you can claim up to the month you are living in a rented house

  68. priya shah says

    Hi Rajesh,
    since provision of sec 24 and sec 8oC are applicable on “Residential property” only and land is not the residential property so you can not claim any such deduction neither u/s24 nor u/s80C. You have to revise your form 16 from the employer.

  69. Senthil says

    I have purchased an apartment with a loan of 16 lakhs. From this month onwards am paying EMI for the amount of 13 lakhs (so far disbursement amount), while the apartment is due possession in Feb 2013. at present, I am living in a rented house.

    In this case; shall i able to claim tax deductions on the Interest and principal amount paid from this month? & Can I claim for HRA benefits for the number of months I have rented the house, as well, in addition to the interest & principal amount deductions?

  70. Prabhu R M says

    I had taken loan for a house during 2006 & I was not Income tax assesee at that time. Now during this F Y 2012-13 I come under IT slab & become assessable for my Salary. The question is whether I can claim the Loan amount under Section 24A for the loan taken during 2006

  71. Raj says

    Thanks for this nice article helped cleared my doubts , I have a query

    If I buy a house in my wife’s name and EMI’s for which I pay, can I avail tax benefits under section 24 ?

  72. Prabhas Ghosh says

    I have purchased an apartment for which I have availed a loan of 30 lakhs. I have been paying my full EMI’s since April 2012, while the apartment is due possession in December 2012. Right now, I am living in a rented apartment in the same city, which I plan to vacate once the new apartment is ready.
    Query 1: Suppose I get the possession of the new apartment in Dec’12, will I be able to claim tax deductions on the Interest and principal amount paid since Apr’12, in this financial year.
    Query 2: Can I claim for HRA benefits for the number of months I have rented the apartment for, as well, in addition to the interest & principal amount deductions?

    Thanks
    Prabhas

  73. RAJESH says

    Hi, I have a taken land loan from HDFC. When I submitted the interest payment certificate to my employer, they have considered it under section 24 and entitled for a deduction in my form 16. However later I came to know that land loan are not considered for deductions. What should I do now for filing returns? Should I prepare as per form 16 or obtain a new form 16 from the employer after correcting/removing the section 24 deduction? Please advice.

  74. Nine Million Dollars says

    Hi Suneel,

    Thanks for appreciating efforts of Priya Shah who has a 5 years experience in the financial industry

  75. Suneel Bhat says

    I have taken loan for the purchase of property which is under construction, and am paying monthly interests for the principal amount. I was not sure whether i can claim the deduction under Section 24 of Income tax act.
    This article of Priya is self explanatory and now understand that the exemption can be vailed only before one year from the date of posession.

    Thanks,

    Suneel Bhat

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