{"id":4300,"date":"2020-07-19T23:33:51","date_gmt":"2020-07-19T18:03:51","guid":{"rendered":"http:\/\/yourcareerheights.com\/?page_id=4300"},"modified":"2020-07-19T23:33:52","modified_gmt":"2020-07-19T18:03:52","slug":"home-loan-tax-benefit","status":"publish","type":"page","link":"https:\/\/yourcareerheights.com\/?page_id=4300","title":{"rendered":"Home Loan Tax Benefit"},"content":{"rendered":"
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Home loan is eligible for tax deduction under section 80C. And when you buy a house on a home loan, it comes with multiple tax benefits too that significantly reduce your tax outgo.<\/h3>\n

1.Deduction for Interest Paid on Housing Loan<\/strong><\/h2>\n

A home loan must be taken for the purchase\/construction of a house and the construction of the house must be completed within 5 years from the end of financial year in which loan was taken. If you are paying EMI for the housing loan, it has two components \u2013 interest payment and principal repayment. The interest portion of the EMI paid for the year can be claimed as a deduction from your total income up to a\u00a0maximum of Rs 2 lakh<\/b>\u00a0under Section 24.\u00a0From Assessment Year 2018-19 onwards, the maximum deduction for interest paid on Self Occupied house property is Rs 2 Lakh. For let out property, there is no upper limit for claiming interest. However, the overall loss one can claim under the head of House Property is restricted to Rs 2 lakh only. This Deduction can be claimed from the year in which construction of the house is completed.<\/h3>\n

2.Deduction in respect of interest paid towards home loan during pre-construction period<\/strong><\/h2>\n

Say, you bought an under-construction property and have not moved in yet. But you are paying the EMIs. In this case, your eligibility to claim interest on the home loan as a deduction begins only upon completion of construction or immediately if you buy a fully constructed property. So does this mean you would not enjoy any tax benefits on the interest paid during the period falling between the borrowing of loan and completion of construction? No. Let\u2019s understand why.\u00a0The income tax law provides for the claim of such interest also, called the pre-construction interest, as a deduction\u00a0in\u00a0five equal instalments\u00a0<\/b>starting from the year in which the property is acquired or construction is completed,\u00a0<\/b>over and above the deduction you are otherwise eligible to claim from your house property income. However, the maximum eligibility remains capped at Rs 2 lakh.<\/h3>\n

3.Deduction on Principal repayment<\/strong><\/h2>\n

The Principal portion of the EMI paid for the year is allowed as deduction under Section 80C. The maximum amount that can be claimed is up to\u00a0Rs 1.5 lakh<\/b>. But to claim this deduction, the house property should not be sold within 5 years of possession. Otherwise, the deduction claimed earlier will be added back to your income in the year of sale.<\/h3>\n

4.Deduction For Stamp Duty and Registration Charges<\/strong><\/h2>\n

Besides claiming the deduction for principal repayment, a deduction for stamp duty and registration charges can also be claimed u\/s 80C but within the overall limit of Rs \u00a01.5 lakhs. However, it can be claimed only in the year in which these expenses are incurred.<\/h3>\n

5.Additional deduction under section 80EE<\/strong><\/h2>\n

Additional deduction under\u00a0Section<\/a>\u00a080EE is allowed to the home buyers for maximum up to\u00a0Rs\u00a0<\/strong>50,000<\/strong>.<\/strong>\u00a0To claim this deduction, the amount of loan taken should be Rs 35 lakhs or less and the value of the property does not exceed Rs 50 lakhs. The loan must have been sanctioned between 1st April 2016 to 31st March 2017. And on the date of sanction of loan, individual does not own any other house.\u00a0Section 80EE has been reintroduced effective from FY 2016-17. Earlier the deduction allowed under Sec 80EE was available for 2 years FY 2013-14 and FY 2014-15 only.<\/h3>\n

6.Additional deduction under section 80EEA<\/strong><\/h2>\n

The budget 2019 has introduced additional deduction under\u00a0Section 80EEA<\/a>\u00a0for home buyers for maximum up to Rs 1,50,000. To claim this deduction, the stamp value of the property does not exceed Rs 45 lakhs. The loan must have been sanctioned between 1 April 2019 to 31 March 2020. And on the date of sanction of loan, individual does not own any other house. The individual should not also be eligible to claim deduction under section 80EE.<\/h3>\n

7.Deduction for Joint Home Loan<\/strong><\/h2>\n

If the loan is taken jointly, then each of the loan holders can claim a deduction for home loan interest up to Rs 2 lakh each and principal repayment u\/s 80C up to Rs 1.5 lakh each in their individual tax returns. To claim this deduction, they should also be co-owners of the property taken on loan. So, loan taken jointly with your family can help you claim a larger tax benefit.<\/h3>\n

1.Deduction for Interest Paid on Housing Loan<\/strong><\/p>\n

A home loan must be taken for the purchase\/construction of a house and the construction of the house must be completed within 5 years from the end of financial year in which loan was taken. If you are paying EMI for the housing loan, it has two components \u2013 interest payment and principal repayment. The interest portion of the EMI paid for the year can be claimed as a deduction from your total income up to a\u00a0maximum of Rs 2 lakh<\/b>\u00a0under Section 24.\u00a0From Assessment Year 2018-19 onwards, the maximum deduction for interest paid on Self Occupied house property is Rs 2 Lakh. For let out property, there is no upper limit for claiming interest. However, the overall loss one can claim under the head of House Property is restricted to Rs 2 lakh only. This Deduction can be claimed from the year in which construction of the house is completed.<\/p>\n

2.Deduction in respect of interest paid towards home loan during pre-construction period<\/strong><\/p>\n

Say, you bought an under-construction property and have not moved in yet. But you are paying the EMIs. In this case, your eligibility to claim interest on the home loan as a deduction begins only upon completion of construction or immediately if you buy a fully constructed property. So does this mean you would not enjoy any tax benefits on the interest paid during the period falling between the borrowing of loan and completion of construction? No. Let\u2019s understand why.\u00a0The income tax law provides for the claim of such interest also, called the pre-construction interest, as a deduction\u00a0in\u00a0five equal instalments\u00a0<\/b>starting from the year in which the property is acquired or construction is completed,\u00a0<\/b>over and above the deduction you are otherwise eligible to claim from your house property income. However, the maximum eligibility remains capped at Rs 2 lakh.<\/p>\n

3.Deduction on Principal repayment<\/strong><\/p>\n

The Principal portion of the EMI paid for the year is allowed as deduction under Section 80C. The maximum amount that can be claimed is up to\u00a0Rs 1.5 lakh<\/b>. But to claim this deduction, the house property should not be sold within 5 years of possession. Otherwise, the deduction claimed earlier will be added back to your income in the year of sale.<\/p>\n

4.Deduction For Stamp Duty and Registration Charges<\/strong><\/p>\n

Besides claiming the deduction for principal repayment, a deduction for stamp duty and registration charges can also be claimed u\/s 80C but within the overall limit of Rs \u00a01.5 lakhs. However, it can be claimed only in the year in which these expenses are incurred.<\/p>\n

5.Additional deduction under section 80EE<\/strong><\/p>\n

Additional deduction under\u00a0Section<\/a>\u00a080EE is allowed to the home buyers for maximum up to\u00a0Rs\u00a0<\/strong>50,000<\/strong>.<\/strong>\u00a0To claim this deduction, the amount of loan taken should be Rs 35 lakhs or less and the value of the property does not exceed Rs 50 lakhs. The loan must have been sanctioned between 1st April 2016 to 31st March 2017. And on the date of sanction of loan, individual does not own any other house.\u00a0Section 80EE has been reintroduced effective from FY 2016-17. Earlier the deduction allowed under Sec 80EE was available for 2 years FY 2013-14 and FY 2014-15 only.<\/p>\n

6.Additional deduction under section 80EEA<\/strong><\/p>\n

The budget 2019 has introduced additional deduction under\u00a0Section 80EEA<\/a> for home buyers for maximum up to Rs 1,50,000. To claim this deduction, the stamp value of the property does not exceed Rs 45 lakhs. The loan must have been sanctioned between 1 April 2019 to 31 March 2020. And on the date of sanction of loan, individual does not own any other house. The individual should not also be eligible to claim deduction under section 80EE. Click here for details on 80EEA:\u00a0Features of Section 80EEA<\/a><\/p>\n

7.Deduction for Joint Home Loan<\/strong><\/p>\n

If the loan is taken jointly, then each of the loan holders can claim a deduction for home loan interest up to Rs 2 lakh each and principal repayment u\/s 80C up to Rs 1.5 lakh each in their individual tax returns. To claim this deduction, they should also be co-owners of the property taken on loan. So, loan taken jointly with your family can help you claim a larger tax benefit.<\/p>\n

\n\n\n\n\n\n\n\n\n
Deductions<\/td>\nSection<\/td>\nMaximum Deduction\u00a0(INR)<\/td>\nConditions<\/td>\n<\/tr>\n
Principal<\/td>\n80c<\/td>\n1.5 Lakh<\/td>\nhouse property should not be sold within 5 years of possession<\/td>\n<\/tr>\n
Interest<\/td>\n24b<\/td>\n2 Lakh<\/td>\nloan must be taken for purchase\/construction of a w house and the construction must be completed within 5 years from the end of financial year in which loan was taken<\/td>\n<\/tr>\n
Interest<\/td>\n80EE<\/td>\n50,000 Thousand<\/td>\namount of loan taken should be Rs 35 lakhs or less and the value of the property does not exceed Rs 50 lakhs<\/td>\n<\/tr>\n
Stamp Duty<\/td>\n80C<\/td>\n1.5 Lakh<\/td>\ncan be claimed only in the year in which these expenses are incurred<\/td>\n<\/tr>\n
Interest<\/td>\n80EEA<\/td>\n1.5 Lakh<\/td>\nThe stamp value of the property should be Rs 45 lakhs or less. The taxpayer is not eligible to claim deduction under section 80EE<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

\u00a0Source: https:\/\/cleartax.in\/s\/home-loan-tax-benefit<\/h3>\n<\/div>\n<\/div><\/div><\/div><\/div><\/div><\/div>","protected":false},"excerpt":{"rendered":"

Home loan is eligible for tax deduction under section 80C. And when you buy a house on a home loan, it comes with multiple tax benefits too that significantly reduce your tax outgo. 1.Deduction for Interest Paid on Housing Loan A home loan must be taken for the purchase\/construction of a house and the construction…<\/p>\n","protected":false},"author":1,"featured_media":4083,"parent":241,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-4300","page","type-page","status-publish","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages\/4300","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4300"}],"version-history":[{"count":1,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages\/4300\/revisions"}],"predecessor-version":[{"id":4301,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages\/4300\/revisions\/4301"}],"up":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/pages\/241"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/media\/4083"}],"wp:attachment":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4300"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}