housing loan

There is two type of interest exemption under income tax Act 1961, first type for self occupied house second type for let out property for let out property there is no exemption cap for interest deduction but for self occupied property there is exemption cap according to purpose and year of loan taken If the following conditions are satisfied, interest on borrowed capital is deductible up to Rs 150,000, 1. Capital is borrowed on or after April 1, 1999 for acquiring or constructing a property. 2. The acquisition/construction should be completed within 3 years from the end of the financial year in which capital was borrowed. 3. The person extending the loan, certifies that such interest is payable in respect of the amount advanced for acquisition or construction of the house or as refinance of the principal amount outstanding under an earlier loan taken for such acquisition or construction. If the conditions stated above are not satisfied, then the interest on borrowed capital is deductible up to Rs 30,000. If the following conditions are satisfied, interest on borrowed capital is deductible up to Rs 150,000, 1. Capital is borrowed on or after April 1, 1999 for acquiring or constructing a property. 2. The acquisition/construction should be completed within 3 years from the end of the financial year in which capital was borrowed. 3. The person extending the loan, certifies that such interest is payable in respect of the amount advanced for acquisition or construction of the house or as refinance of the principal amount outstanding under an earlier loan taken for such acquisition or construction. If the conditions stated above are not satisfied, then the interest on borrowed capital is deductible up to Rs 30,000. If the following conditions are satisfied, interest on borrowed capital is deductible up to Rs 150,000, 1. Capital is borrowed on or after April 1, 1999 for acquiring or constructing a property. 2. The acquisition/construction should be completed within 3 years from the end of the financial year in which capital was borrowed. 3. The person extending the loan, certifies that such interest is payable in respect of the amount advanced for acquisition or construction of the house or as refinance of the principal amount outstanding under an earlier loan taken for such acquisition or construction. If the conditions stated above are not satisfied, then the interest on borrowed capital is deductible up to Rs 30,000.