Housing loan repayment query

Hello,

The amount paid as Repayment of Principal Amount of Home Loan by an Individual/HUF is allowed as tax deduction under Section 80C of the Income Tax Act. The maximum tax deduction allowed under Section 80C is Rs. 1,50,000.

This tax deduction under Section 80C is available on payment basis irrespective of the year for which the payment has been made.

Hi Sakitram

Both interest and principal will be allowed u/s 24b and 80C respectively on payment basis. so accordingly you have to cosider this in FY 2014-45.

My understanding is just this.

Bank generated interest on 31-03-2014 = A
Payment of EMI (ie above interest + principal) on 01-04-2014 = B

Both A and B to be counted in FY 2014 - 2015 (just as per payment basis)

Hope I am correct with this.

Thanks

Hi,

Both principal & interest can be claimed only on Payment basis, i.e. when the same is actually paid & not when the same is accrued.

Originally posted by : Sakitram
	My understanding is just this. Bank generated interest on 31-03-2014 = A Payment of EMI (ie above interest + principal) on 01-04-2014 = B Both A and B to be counted in FY 2014 - 2015 (just as per payment basis) Hope I am correct with this. Thanks

yes, But for taking the dedcution, consider B only by bifurcation of interest and principal amount simply minus the A from B so rest amount of B will indicate to principal. so take the dedcution accordingly u/s 24b and 80C. 

Hello

Not agree with arif & gaurav for interest claim

Tax deduction of Interest on Home Loan under Section 24 is deductible on payable basis, i.e. on accrual basis. Hence, deduction under Section 24 should be claimed on yearly basis even if no payment has been made during the year as compared to Section 80C which allows for deduction only on payment basis.

Originally posted by : Sakitram
	My understanding is just this. Bank generated interest on 31-03-2014 = A Payment of EMI (ie above interest + principal) on 01-04-2014 = B Both A and B to be counted in FY 2014 - 2015 (just as per payment basis) Hope I am correct with this. Thanks

Then in this case, the Principal and Interest go like this.

A (interest) --> FY 2013-2014

B (only Principal) --> FY 2014-2015

Thanks

Then in this case, I think the Principal and Interest go like this.

A (interest) --> FY 2013-2014

B (only Principal) --> FY 2014-2015

Thanks

yes Sakitram,

deduction of interest on home loan u/s 24b is allowed on payable, not on payment basis. so correct me.

further you can claim deduction of interest u/s 80EE also, if 

Applicability- Benefit of this section can avail by Individual assessee. Deduction under this section is not available for any other assessee (like HUF, firm etc.). Individual can claim benefit under this section only when all the following conditions are satisfied, these are-

• Purchaser should be first time buyer. i.e. he has never purchased any house and now he is going to purchase a house.
• Value of the house should not more than 40 lakh.
• Loan taken by Individual for the purpose of buy a house should not be more than 25 lakh.
• On the date of sanction of loan individual does not have any own residential house property.
• Loan for this purpose taken by individual should be from the Financial Institution or Housing Finance Company.
• For this purpose, loan should be sanctioned between 01.04.13 to 31.03.14.

Quantum of Deduction- Assessee can take deduction u/s 80EE on interest payable on home loan upto 1 Lakh in A.Y.2014-15. It can claim deduction in two assessments year. Means if whole amount of interest payable upto 1 lakh is not claim as deduction in A.Y.2014-15 then remaining balance amount upto 1 lakh can claim in A.Y.2015-16.Total deduction under this section shall not be more than 1 lakh.