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House property loan deduction

byju ezhumavil (accountant) (42 Points)

24 October 2014

An assesse has taken a loan for ground floor construction of a house is availing deduction u/s 24.Again he want to taken another loan for first floor construction with out closing the first loan, Can he claim deduction for interest and principal for the both the cases. What is the limited for deduction ..Please he me at the earliest

byju

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5 Replies

Jaikishan (CA) (168 Points)
Replied 24 October 2014

As per Section24 of Income tax Act any subsequest loan borrowed to repay the original loan shall be entitled to same treatment as original loan. Therefore interest payable would also be admissible as deduction in computation of income under house property.

As the house is self occupied the maximum amount of deduction of interest under Section 24 will be maximum of Rs 2 Lacs with effect from this Financial year.(Earlier year Rs 150000 on self occupied property).

As regards principal maximum amount of deduction under section 80C will be Rs 150000 with effect from this financila year (Earlier Rs 100000). However if residential property is under construction and principal is already being repaid the same will not qualify for deduction.

Mihir (Wealth Manager) (5293 Points)
Replied 24 October 2014

Yes, you may provided the interest and principal portion is within the limits of section 24 and 80C.

sakthi (Business consultant ) (137 Points)
Replied 25 October 2014

Hi all,

I have availed housing loan for purchasing plot (vacant land) and i am paying EMI (principle + interest), shall i claim interest & principle portion for my tds workings. As a salaried person i have to workout my tax liability and deduct tds on monthly basis. Since there is no construction had started, how can i avail section 80 C, u/s 24 and prior period interest? pl suggest how to treat my emi for this Fy 14-15?

rgds

sakthi

Jaikishan (CA) (168 Points)
Replied 26 October 2014

Dear Sakthi,

Vacant Land is not considered under House Property. Hence no tax benefits available for the same.

rajendra kumar (tgt) (29 Points)
Replied 26 October 2014

please give me detail about that can a tax payer or employee take tax relief both House rent allowance which paid by him in metro city where he/she doing job and already taken a home loan at native place before come this job place ? if yes can provide me detail and circulars and other proof which is demand by DDO...... urgent plz

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