To understand the key tax benefits on a home loan, we are bifurcating the repayment techniques into four major elements-tax benefits on principal repaid, tax benefits on interest paid, deduction on pre-construction interest, and section 80EE income tax benefits. The next section will let you know the concept in detail.
Tax Benefits on Principal Repaid
Under section 80C of the Income Tax Act, the maximum deduction allowed for the repayment of the principal amount of a home loan is Rs. 1.5 lakh. Deduction under section 80C also includes investments done in the PPF Account, Equity Oriented Mutual funds, Tax Saving Fixed Deposits, National Savings Certificate, etc. subject to a maximum of Rs. 1.5 lakhs.
Besides this, there are stamp duty and registration charges that one can claim under the aforementioned section. However, the claim can only take place in the year in which the payment was made.
Nevertheless, there’s a condition under which this repayment of the principal amount of the housing loan is allowed. The deduction is only possible after the house gets entirely completed and there is a completion certificate for the same. The principal amount paid on any under-construction structure/property is not going to be a part of this section.
Tax Benefits on Interest Paid
Under section 24 of the Income Tax Act, one can avail of the deduction on a Home Loan for payment of Interest tax benefits. The self-occupied property allows the deduction with a maximum limit of Rs. 2 lakh if it takes completed within 5 years from the end of the Financial Year, otherwise, the maximum limit is Rs. 30,000.
Interest on housing loans paid for the let-out property is fully allowed in the relevant assessment year in which it is claimed.
From Assessment year 2018-19, the loss from house property head that will be allowed to be set off from other heads of income will be restricted to Rs 2,00,000 in a particular assessment year, and the rest amount shall be carried forward for set-off in subsequent years.
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Tax Deduction on Pre-construction Interest
You can also claim interest on a housing loan paid before the completion of the construction of the property. It is termed pre-construction interest. It is allowed in 5 equal instalments beginning from the financial year in which the construction is completed. The limit of 2 lacs will also apply for pre-construction interest in the case of self-occupied property. However, it is fully allowed in case we let our property.
Section 80EE Income Tax Benefit
Section 80EE proposes an additional deduction of Rs 50000 in respect of interest on housing loans to first-time house owners who own a house of Rs 50 lakh or less and have taken a home loan amount of less than or equal to Rs 35 lakh. The loan should be sanctioned between April 1, 2016, and March 31, 2017, to claim a deduction under this section. This deduction shall be in addition to the interest allowed under section 24(b) of the Income Tax Act, 1961.
Deductions Claimed by Individuals Under Section 80EEA
As mentioned under the newly inserted section 80EEA of the Income Tax Act, the government has extended the limit of deduction up to Rs. 1,50,000 applicable to the interest paid by any individual on the loan against residential property.
As per the policies, the deduction is available for individual residents only and for the property having a stamp value of less than Rs. 45 Lakhs.
Also, the loan needs to be sanctioned between 1 April 2019 to 31 March 2022, and the individual should not own any other residential property at the date of sanctioning the loan. Lastly, the person should not be eligible for claiming any deduction U/S 80EE.
Joint Home Loan Deduction
In case the home loan is taken jointly, then the loan borrowers are eligible to claim a deduction of up to 2 lakh each for the home loan interest and principal repayment u/s up to INR 1.5 lakh each in the tax return individually. They all must be co-owners of the property and further it helps in the larger tax claim benefits if in the family itself.
| Deductions | Section | Maximum Deduction (INR) | Conditions |
|---|---|---|---|
| Principal | 80c | 1.5 Lakh | No sale of property within 5 years |
| Interest | 24b | 2 Lakh | The loan has to be taken for construction and has to be completed within 5 years |
| Interest | 80EE | 50,000 Thousand | The loan amount must be under 35 lakhs , and the property value under 50 lakhs |
| Stamp Duty | 80C | 1.5 Lakh | Availed only in the year of expense |
| Interest | 80EEA | 1.5 Lakh | The stamp value of the property is under INR 45 lakh. Taxpayers are not eligible to claim a deduction under section 80EE |
However, in the new tax regime, deduction is not allowed under sections 24(b), 80C, 80EE and 80EEA.
I am retired CG employee and retired on 31 may 2024. Can i show principle of home loan up to 1.500 lakhs under 80C while filing. but problem is while filing 80 c deduction column is not comin i.e showing . how to filke in this case
Hello Sir. My query is for LTCG tax exemption for home. Suppose I’m availing of a loan to buy a new property which will be available for possession within 6 months. When I get possession of property after that I will sell the current home(in which I’m residing). I will use that sale amount to payoff the loan for my new property. Will I be allowed for exemption from LTCG tax for sale of my current home ? As I will be using it to repay home loan only which was used for acquiring a property. Since I will get possession after 6 months only, that is why I have to avail of home loan in order to make payments
“As per section 54 seller should purchase a residential house either 1 year before the date of sale/transfer or 2 years after the date of sale/transfer or construct the residential house within 3 years from the date of sale/transfer then seller can avail tax exemptions from Capital Gains.”
Hi,
I was having home loan which I have fully paid in FY 2023-2024. However the home loan interest paid in previous years before closure was always more than the tax benefit amount of Rs 2 lac.
For eg. in FY 2023-2024 the total interest paid was Rs. 5 Lac. where as I have claimed tax benefit of Rs. 2 Lac (max allowed as per IT). Thus the remaining amount of interest paid is Rs. 3 Lac.
Can I now claim the tax benefit of Rs. 2 Lac again from this previous year interest paid remaining amount of Rs. 3 Lac for the next FY Year i.e. 2024 – 2025 or even the remaining amount of interest for previous years like 2022-2023, 2021-2022 et.
If yes, what is the number of previous years from which I can claim this kind of tax benefit and till what time?
Thanks.
Sundeep
The deduction of INR 2 lakh is allowed for self-occupied property, and the entire interest is deductible for let out property & unabsorbed loss shall have to be carried forward for set off against house property income in next eight years in case of let out property.
hi sir
is the interest on the home loan of the let out property can completely claimed under 24 b, .i.e more then 2 lakhs
or only while calculating the income from the home loan
Under section 24b deduction can claim up to 200000. Section 80EE allows income tax benefits on the interest portion of the residential house property loan availed from any financial institution. As per Section 80EE, you can claim a deduction of up to Rs. 50,000 per financial year in addition to 24b.
Hi,
Kindly see the following scenario:
Husband and Wife purchased flat jointly in their name and house loan is also in joint name. But only husband earns and pays the EMI from his salaried account. Wife is a homemaker and do not earn. Total interest on home loan this FY is 360000/-. Can husband claim 200000/- u/s 24b or he can claim only 180000/- . Wife is not earning and hence dont want to claim any rebate.
Kindly share the supporting documents also.
IF HOME LOAN PRINCIPLE AMOUNT 150000 & INTEREST IS 200000 THEN HOW THE COUPLE CLAIM THE HOME LOAN BENIFIT?
Home loan principle amount can claim in section 80C And interest rebate can take under section 24 (b).
dear I have two home loan, 1st taken on 2018 and 2nd taken Sep2019
so 1st loan(interest 1.5lacs) cailmed as self occupy in 24B and 2nd loan (interest 1.5lacs) how to claimed for 80EEA as…. ?
“Following condition should be satisfy for claiming exemption under section 80EEA –
Housing loan must be taken from a financial institution or a housing finance company for buying a residential house property.
The loan should be sanctioned during the period 1st April 2019 and 31st March 2022.
Stamp duty value of the house property should be Rs. 45 lakh or less.
The taxpayer should be a first-time home buyer. The taxpayer should not own any residential house property as of the date of sanction of the loan.
To claim the deduction under section 80EEA, ascertain the total interest portion during the year and claim a deduction of Rs.2 lakh under section 24(b). If the limit is exhausted, you can claim further deduction under section 80EEA up to Rs.1.5 lakh, subject to all other conditions for eligibility being satisfied.”
house property both less Rs. 45 lakh
but last i filled income tax return for 2nd load but 80EEA option got hide and 80EE option visible , why this heppend…..?
“Section 80EEA of the Income Tax Act, 1961, provides an additional deduction on home loan interest for first-time homebuyers of affordable housing. The deduction is available to individuals who are first-time homebuyers.”
MEDICAL TREATMENT OF HANDICAPPED DEPENDANTS U/S 80DD
Artificial leg (80% disability)change every year my son how can apply that
Hi,
Thanks for your wonderful article. I am trying to complete my ITR-2 and have a query.
For my Self occipied home , the home loan interest is much more than 2 Lakh, I am aware that I can get 2 Lakh deduction for this.
My question is where and how do I enter into the ITR-2 , so that the remaining house property loss , i.e. total home loan interest paid minus 2 Lakh, is carried forward for next years?
Kindly explain.
Only Loss in let out property is allowed for carry forward. In case of self occupied is no Loss is allowed to be carry forward.
Thanks for the quick revert.
Could you please point out to the IT act reference explaining this?
In IT Topup home loan interest considered or not
SIR,
I HAVE GET GROSS RENT FROM MY PROPERTY 6,00,000.00 AND I HAVE PAID HOME LOAN INTEREST 5,31,253.00. SO THAT HOW MUCH INTEREST TAKE IN SECTION 24 IN IT
In sec 24 A standard deduction Of 30% of annual rent value allowed after That In 24 B for let out house property full of amount of interest is allowed
Sir, I did not find any condition for claiming deduction u/s 80C and u/s 24(b) that the property should not be transferred within 5 years or Completion should be made within 5 years. Kindly give me a reference where these conditions are stated.
Thank you.
Please refer to Section 24 (b) of Income Tax Act 1961
Dear Sir, I have purchased land and constructed house in 1260sqft. Loan sanctioned on 18-03-2022. The plot+construction value is 42lakhs. I paid interest in fy22-23 approx 162000/- but not claimed during ay23-24 itr3 form due to the house possession was given in Mar-2023. I have the let out the property and receiving 5200/- rent. Fy23-24 i will be paying 261000 interest. Can i claim overall interest (261000+(162000/5)) 293400/- under section 24b along with additional benefit of 150000/- under section 80EEA? I am unable to see section 24b in ITR3 form. I will show rental income as 62400/-. I am a salaried employee with 18.5lakhs salary. Please suggest.
I have deductions from other investments like PF, SS etc in section 80C already totalling to 1.5 lakhs. Is this benefit of 1.5 lakhs from Home loan principal repayment over and above the 1.5 lakh deduction from other investments in Section 80C ?
No, the principal repayment will be considered under section 80C and the maximum deduction allowed under section 80C is Rs 1,50,000.
Can I avail of exemption u/s 24 b when principal repayment is Nil?
Yes, you can claim exemption u/s 24 even when the principal repayment is NIL
A property of 1200Sq ft is jointly owned by Mr A and Mr B. And loan of 60 lacs is taken for this property purchase.
Can they claim sec 80EEA benefit? Since share of each in the property is only 600Sq Ft- within the limit of 645 Sq ft.
Yes they can take the benefit but the amount of Deduction does not exceed Rs 150000 and is allowed in computing the total income of the individual of Assessment Year beginning on 1st April 2020
Hi,
So, there is a property of 55L with ownership between A & B and a loan amount of 50L which is repaid only by B. Can B take the benefit of 80EEA for an additional 1.5L over Sec24 as each person’s ownership is halved between A & B?
Can I claim rebate of Rs. 50,000/- u/s 80ee (being already eligible), if the interest portion for said period is Rs. 2,18,000/-, out of which tax benefits of Rs. 2,00,000/- u/s 24(b) has already availed OR I should take rebate of only remaining amount of Rs. 18,000/-. Kindly advise keeping in view S. 80ee of Income Tax Act.
You can only claim the amount of Rs 18000 as you have claimed the deduction of Rs 200000 u/s 24(b).
Hello
I have 2 sources of income
My Form 26AS shows TDS deduction one under section 192 and other under section 194JB.
Which ITR form to be used.
Section 24b, not available or visible in new ITR-1 form.
To get benefit of Rs. 2 Lakhs ( interst on Home Loan) , no option provided.
Any response, please post here.
In the case of joint owners, can each owner claim individually under 80c and 24 to the extent paid for the financial year?
Yes, In the case of Joint Owners each owner can claim 80C and 24 deductions for the financial year to the extent of their share in the property.
“to the extent of share in the property”, where is it written in the act or rules specifically?
I mean even if the share is equal, deductions can be unequal in my view.
Please quote the relevant provision of law, to confirm that the deduction will be available in proportion to the share in ownership.
You can just simply put that on Interest on Loan Under the head house property, it will automatically go to section 24b
can i claim 80ee for house purchased on march 2018?
NO.
The loan should be sanctioned between April 1, 2016, and March 31, 2017, to claim a deduction under this section
I will be able to claim tax benefit of 80EE if my interest amout paid is below 2 lakhs
Home loan Interest amount is below 2 Lakhs will I be able to claim tax benefit of 80EE
Loan taken in August 2016 and loan value is below 35 lakhs and property value is below 50 lakhs
I want to purchase resale property having OC received in 2013.
I am First Time Home Buyer, with loan amount 45 lacs.
home size carpet area 629 sq.ft. and Terrace 91 sq.ft. (Total 720 sq.ft.)
Am I eligible to take benefit of 80EEA if purchase resale property in Jan 2022?
Hi Pradeep,
I do not have a house but I hold a residential plot in my name. Now if I buy an affordable home with a home loan up to 30-35lakhs that satisfies all conditions of 80EEa and Am I eligible to claim tax benefits both in 24a and 80eea?
how to file IT return for AY 2019-20
Is interest on Home loan considered while deducting TDS and if YES where is it mentioned in the form 16 to be issued
Principal amount of house building loan deduction can be claimed as80c sec but ch6a+b. Total deduction is allowed 1’5 then how could I be able to take the benifit of principal amount deduction pl let me know
You can claim the principal benefit only under section 80C which is subject to a maximum of Rs 1,50,000.
Dear Sir
I have taken a home loan in 2012 and in Jan 2021 I got possession of the same.
For the financial year 2021-22 how much tax benefit I will get, is only for interest amount or any principal amount I can claim.
Regards
ashwini
My Home loan was dispatched in Feb 2018. Property value is below 45 lakhs and below the required sq ft area. Can I apply for 80EEA? I’m NOT eligible for 80EE.
The assessee is eligible to claim deduction u/s 80EEA if the loan is sanctioned from the period April 2019 to March 2020.
I am state gov employee and have taken housing advance from my office. Currently i m paying only principle amount. Interest will pay once principle is fully repaid. How should I claim interest deduction in ITR?
Please refer the section 80C, 24(b), 80EE and 80EEA.
Regret to state that you do not give any advice. You only advice people to refer to certain sections of the I. tax Act.
Pointless for people to be seeking any advice from you.
Sir, we provide solutions to queries that are related to our blog. We don’t provide any consultancy.
It is the interest debited in the account that can be claimed. It is clarified that the claim under section 24 is for interest accrued in the loan account and even if not actually paid by the borrower. Just take a statement of account for the last financial year and add 12 months interest debited in the account and claim it subject to a maximum of 2 lacs. It is permitted. Most of the PSU employees have filed and it’s permitted.
The housing loan is taken on 20/11/20. Pre -emi interest for 20/1/20 – 30/11/20 paid on 01/12/20. Thereafter interest for December, January, February and March paid/will be paid on the first of the following month. I wish to know whether the interest for the month of March 2021 that will be paid on 01/04/21 will be eligible for deduction in the current financial year.
Please refer section 24(b), 80EEA, 80EE, and 80C of the income tax act 1961
I have gone through those sections of the I. Tax Act. The question that I have asked is not properly addressed. That was the reason I have asked the question. Would appreciate your reply. Thanks.
Hi, Section 80EEA says the stamp value of the property should be less than 45 lakhs. Here stamp value of the property refers to stamp duty paid or the value of the property? I have purchased a property of value 1.37 Cr and the stamp duty paid is around 8 Lakhs. Would need more clarification.
Hi Sir
My housing loan was approved in May 2017 and it was my first house. Am I eligible for deduction in 80EE?
I have taken a loan on a house under construction in Sept 2019 and have started paying EMIs. However, I am yet to get possession., as it is delayed due to the pandemic. What sort of tax rebate and under what categories can I claim while filing ITR for the year completing March 31st, 2020. Request a reply plz.
Please refer section 24(b), 80eea, and 80c of the income tax act 1961
Hi,
My question is regarding ITR Excel/Java Utility.
My wife and I have bought a house property jointly for which the total interest for FY 2019-20 is 3,50,000 and is equally contributed by both.
So after entering the ownership as 50%,
should I enter the field “B2 (v) Interest payable on borrowed capital” in the ITR2 Form as half of 3,50,000 = 1.75L or
should I enter 3,50,000 expecting the ITR2 Excel/Java utility to do the calculation?
What is the criterion for claiming medical expenses for parents under Section 80D? Is there any criterion to decide dependent parents as per section 80D?
PLEASE REFER SECTION 80D
Hello Sir,
I am a central govt employee and am living in govt quarters. I have purchased a flat in co-ownership with my husband. Can I claim the interest on the home loan paid under “Self-occupied” house property? Or do I need to show calculation as “deemed-to-be let out” property?
If you have taken loan in your name then you can claim interest by showing property as deemed to be let out.
If the loan sanctioned on Jan 2019 i.e fy 18 19, can someone claim 80eea while filing for fy 19 20?.
I have taken a home loan in Aug 2013, am I eligible to avail of section 80EE?
Deduction under Section 80EE is allowed only when the loan is sanctioned between 1st April 2016 to 31st March 2017.
Sir, I took a Home loan in 2010 & got possession from Unitech in 2019, under Supreme court intervention. I have rented out the property also. Can I claim Sec 24 benefits even though the house took more than 5 years to be built? Also, the house is NOT Registered till date ( No stamp duty paid) & only a possession certificate has been given by Unitech. Can I claim Section 24 benefits of Rs. 2 Lakhs + Pre-construction interest/ divided by 5? Pls, share advice.
Deduction of Rs 2 Lakh plus Pre-Construction Interest u/s 24 will be allowed only when the property is acquired or constructed within 5 years from the approval of the Loan and that loan is taken after 1st April 1999. so you will not be able to claim the benefit of Rs 2 Lakhs for this.
Hi,
My loan sanction date is 01-01-2019 and my property value is less than 45 Lacs. Can I claim interest of 1.5 LAC under section 80EEA for both FY 2018-19 and 2109-20?
As per the article, an individual loan sanction date should be between 01st April 2019 to 31st March 2020.
Please confirm if I can claim for at least one FY year under 80EEA
No, as the loan sanction date should be from 1st April 2019 to 31st March 2020
my loan sanctioned date is 27th of March 2019. Am I eligible for 80EEA
If loan sanctioned on jan 2019 i.e fy 18 19, can someone claim 80eea while filing for fy 19 20?.
Please read section 80EEA of the income tax act 1961
I too have the same question, my loan sanctioned date is 27th March 2019, am I eligible for 80EEA, where it says 1st April 2019 Only 4 days gap