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Querist : Anonymous

Querist : Anonymous (Querist)

31 October 2014 Dear Sir,

I have taken a HBL to construct a floor on an old existing house this year i.e. FY 2014-15. Can I get tax exemption on principal amount and interest paid and if yes up to what limit and under what sention/s.

An immediate and legitimate answer shall be highly appreciated.

Thanks & regards

Harsha goyal

Harsha goyal (Expert)
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31 October 2014 As the repayment comprises of 2 different components, the tax benefit on home loan is governed by different sections of the Income Tax Act and these are claimed as tax deductions under different sections while filing the Income Tax Return.:

1. The amount paid as Repayment of Principal Amount of Home Loan by an Individual/HUF is allowed as tax deduction under Section 80C of the Income Tax Act. The maximum tax deduction allowed under Section 80C is Rs. 1,50,000. (Increased from 1 Lakh to Rs. 1.5 Lakh in Budget 2014).

2. As per Section 24, the Income from House Property shall be reduced by the amount of Interest paid on Home Loan where the loan has been taken for the purpose of Purchase/ Construction/ Repair/ Renewal/ Reconstruction of a Residential House Property.

The maximum tax deduction allowed under Section 24 of a self-occupied property is subject to a maximum limit of Rs. 2 Lakhs (increased in Budget 2014 from 1.5 Lakhs to Rs. 2 Lakhs).

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