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Tax Benefit on Housing Loan

on 05 March 2014


(Sec. 24, 80C and 80 EE of Income Tax Act)

Repayment of Housing are divided into 2 components

1. Repayment of the Principal portion

2. Repayment of the Interest

Section 80C: Tax benefit on Housing Loan (Principal Amount)

- The amount paid as Repayment of Principal Amount of   Housing Loan by an Individual/HUF is allowed as tax deduction.

- The Maximum tax deduction allowed under This Section 80C is Rs. 1, 00,000.

- This Tax deduction of Rs. 1,00,000 is the total of the deduction allowed under Section 80C and includes amount like LIC , invested in PPF Account, Tax Saving Fixed Deposits, Equity Oriented Mutual funds etc.

- The Amount paid as Stamp Duty & Registration Fee is also allowed as tax deduction under Section 80C.

Under the Indian Income Tax Act, 1961 Total deduction of Rs 2.5 lacks allowed for interest on borrowed capital. Interest deduction of Rs. 1 lacks (Sec.80EE) and Interest deduction of Rs. 1.5 lacks (Section 24 (b))

Section. 24 (b) & 80 EE Tax benefit on Housing Loan (Interest Amount)

Brief disclosure as follows:-

- As per Sec 24(b) of the Income Tax Act, 1961 a deduction up to Rs. 1,50,000 towards the total interest payable on the home loan towards purchase / construction of house property can be claimed while computing the income from house property.

- The deduction stands reduced to Rs. 30,000 in case of loans taken prior to Mar 01, 1999.

- The interest payable for the pre-acquisition or pre - construction period would be deductible in five equal annual instalments commencing from the year in which the house has been acquired or constructed.

New Tax benefit on Housing Loan (Interest Amount Portion)

An assessee will be able to take additional interest deduction house property loan under section 80EE if follows these conditions – (Only for Indiaviaul)

i. Loan has been sanctioned for house by any financial institutions from 01 April, 2013 to 31 March, 2014.

ii. Loan amount sanctioned for acquisitions house property does not exceed 25 Lacs.

iii. Value of house property not exceed of Rs. 40 lacks.

iv. Buyer does not own any residential house property on the date of sanction of loan.

v, Deduction shall be allowed up to Rs.1 Lakshs for the Assessment year 2014-2015 ,In case Interest payable during AY 2014-2015 is less then Rs.1 Lakhs the balance amount shall be allowed for the AY 2015-2016.

Note:- This is a brief disclosure on Deductions under Section80C, 80EE and under Section 24 (b) of India Income Tax Act, 1961.

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