Home loan interest

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 July 2016 Dear Sir,
Assessee filing return u/s 44AD and want to take deduction in respect to interest on home loan, then which itr he has to file by him. Itr 4 or itr 4S.
If itr 4S can be used then in which column of itr 4S, the interest amound should be dedcuted from net profit.

Please advise me.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 July 2016 ITR-4S. HL interest to fill in column B3.

Querist : Anonymous

Querist : Anonymous (Querist)

28 July 2016 And what is the maximum allowed amount that can be claimed as interest for the fy 2015-16

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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28 July 2024 For the Financial Year (FY) 2015-16, the maximum amount that can be claimed as a deduction for interest on home loans under Section 24(b) of the Income Tax Act is as follows:

### **Interest Deduction on Home Loan (Section 24(b))**

1. **Self-Occupied Property:**
- **Limit:** You can claim a deduction of up to ₹2,00,000 per annum on the interest paid on the home loan for a self-occupied property.
- **Eligibility:** This deduction is available if the property is self-occupied or is vacant.

2. **Let-Out Property:**
- **Limit:** For a property that is let out, there is no upper limit on the amount of interest that can be claimed as a deduction. You can claim the entire interest paid on the home loan.
- **Condition:** The rental income from the property will be subject to tax under the head "Income from House Property," but you can reduce this taxable income by claiming the interest deduction.

### **Additional Considerations for FY 2015-16:**

- **For Self-Occupied Property:**
- If the property is self-occupied, you are eligible for a deduction of up to ₹2,00,000 on interest. If the interest amount exceeds ₹2,00,000, the excess amount cannot be claimed under this section.

- **For Let-Out Property:**
- You can claim the entire amount of interest paid, regardless of the amount. This provision is beneficial if you have a significant amount of interest payments on loans for properties that are let out.

- **Pre-Construction Interest:**
- Interest paid during the pre-construction period (before the construction of the property is completed) can also be claimed. The total pre-construction interest can be claimed in five equal annual installments starting from the financial year in which the construction is completed.

### **Example:**

If you have a home loan interest of ₹3,00,000 for a self-occupied property:
- You can claim up to ₹2,00,000 as a deduction under Section 24(b).
- The remaining ₹1,00,000 cannot be claimed under Section 24(b) but might be considered if the property is let out.

For a let-out property:
- You can claim the entire ₹3,00,000 as a deduction against rental income.

**Summary:**
- **Self-Occupied Property:** Deduction up to ₹2,00,000 on interest.
- **Let-Out Property:** No limit on the amount of interest that can be claimed.

Ensure that you retain proper documentation and statements for all interest payments made to support your claims in case of any tax scrutiny.

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