Deduction under sec 24(b)

383 views

Save Share

Join Us Follow Us Add as Source

S S Dahale

Agri and business

313 Points Posted on 26 June 2016

Whether one can make of early repayment or part repayment of Home loan? To get more tax exemption under sec 24 (B) of Income tax. As repayment of Housing loan carries 2 components 1.. Interest on borrowed loan , …covered under sec.24(b), and 2… repayment of principle amount , covered under sec.80(C),—presently limited to Rs.150000, (2015–16); as home loans are more of ticket size +20 lacs ; Also as most of the people in India , does have investments in PPF , Insurance policies ,deduction under sec.80C ( of limit Rs150000 ) is taken care by it( almost, varies from person to person) so is it prudent to avail most permissible deductions under sec.24(b) by making more EARLY repayments towards interest on housing loan.

Replies (2)

Mohan

Audit Assisstant & Accounts Manager

379 Points Posted on 26 June 2016

Please read terms and conditions mentioned carefully. If prematurity payment is not conditioned then you can do the same. But normally financers put some conditions to restrict pre-maturity payment.

S S Dahale

Agri and business

313 Points Posted on 27 June 2016

What is important is tax exemption for part repayment that one gets , on interest component , that is covered u/s 24(b), assuming a person is paying , interest on boorrowed capital / home loan, to the tune of Rs1,70000/- which can be claimed to be deduction , to avail more deduction , he should (prudently) pay Rs 30000 Extra , to Banks or fiannacing institution , to avil max deduction, of Rs200000/0, such that his net IT demand too will be lowered.