Home loan deduction

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 May 2017 Dear Sir,
Suppose an assesse has taken home loan from Bank A in 2010 and also taken home possession in 2010. Then in 2014 due to rise in interest rate he transferred his loan to another bank B.
Now in this regard I have following queries -
1. Whether, still he can take deduction of home loan payment even the loan transferred to another bank and he did not taken benefit of deduction in earliar years..
2. What is limit of principal amount deduction u/s 80 C in one year.
3. What is the limit of interest payment deduction.
Please advise me.

Expert : Anonymous

Expert : Anonymous (Expert)

29 May 2017 yes, Deduction can be claimed even not claiming in earlier years. 80C is 150,000/- and max interest is 2,00,000/-

Expert : Anonymous

Expert : Anonymous (Expert)

29 May 2017 in self occupied house and in case of let out - unlimited amount

Querist : Anonymous

Querist : Anonymous (Querist)

30 May 2017 assessee can take only 2 lacs deduction in respect to interest or
it is 2 lacs per year ?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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28 July 2024 Certainly! Let's address your queries related to home loan deductions comprehensively:

### 1. **Deductions After Transfer of Home Loan**

**a. Deduction Continuation:**
- **Interest on Home Loan (Section 24(b)):** Yes, you can still claim the deduction for interest on the home loan even after transferring the loan from Bank A to Bank B. The transfer of the loan does not affect your eligibility to claim deductions, provided the loan continues to be used for the same property and the property is used for residential purposes.
- **Principal Repayment (Section 80C):** Similarly, the principal repayment deductions can be claimed for the transferred loan as long as the repayment is for the same property and the conditions for claiming deductions are met.

**b. Benefit of Deductions in Earlier Years:**
- **Not Claimed Earlier:** If you did not claim the benefit in earlier years (before transferring the loan), you cannot claim it retroactively for those years. However, you can start claiming the deductions in the year you start claiming them, provided you meet all the criteria.

### 2. **Limit of Principal Amount Deduction (Section 80C)**

**a. Deduction Limit:**
- The maximum deduction available under Section 80C for principal repayment on a home loan is ₹1,50,000 per annum. This is part of the overall limit of ₹1,50,000 available under Section 80C for various investments and expenses, including life insurance premiums, PPF, EPF, and ELSS.

### 3. **Limit of Interest Payment Deduction (Section 24(b))**

**a. Deduction Limit:**
- The maximum deduction for interest on home loan is ₹2,00,000 per annum under Section 24(b). This deduction is available for self-occupied properties.
- If the property is rented out, the entire interest paid can be claimed as a deduction under Section 24(b), subject to the overall limit of ₹2,00,000.

### **Summary:**

1. **Deductions After Transfer:** You can continue to claim deductions for both principal and interest payments on a home loan even after transferring the loan to another bank. Ensure the property is used for residential purposes and that proper documentation is maintained.

2. **Principal Deduction Limit:** The maximum deduction under Section 80C for principal repayment is ₹1,50,000 per annum.

3. **Interest Deduction Limit:** The maximum deduction for interest on home loan is ₹2,00,000 per annum for self-occupied properties. If the property is rented out, the entire interest can be claimed as a deduction, but subject to the overall limit if applicable.

If you have specific cases or need further assistance, consulting a tax advisor or chartered accountant would be beneficial to address any detailed queries or nuances in your particular situation.

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