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housing loan principal and interest

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Querist : Anonymous

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Querist : Anonymous (Querist)
21 April 2011 dear sir,

My sales manager constructed a house with loan. he wants calim exemptions. i was exempted Rs.150000/- towards interest. he came to know from his friends circle, on principal amount(paid during the year) 20% is eligible for expemption. what is reality. please guide me.
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CA. Deepak Narula

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CA. Deepak Narula (Expert)
21 April 2011 Interest is allowed u/s 24(b) in computing the income under house property and will be allowed up to a maximum of Rs. 150000/- for self occupied house and principle amount is allowed u/s 80C up to overall limit provided in section 80C i.e. Rs. 100000/-. There is no such thing as 20% principle amount as deduction.
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Ratan Sharma

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Ratan Sharma (Expert)
21 April 2011 Agree with expert. There is one another provision . Interest paid during preconstruction period is allowable in next 5 years i.e. 20% each year from the year in which the house construction is completed. your employee might have been talking about this.
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