Whether it deduction allowed under home equity loans

Tax queries 565 views 4 replies

P P Das (Partha)

3 Points Posted on 17 May 2017

Hi,

I have a Home Loan running with SBI and the property (self-occupied, NOT rented, in a diffrerent city than my working place), is mortgaged with them. I have taken a Home Equity Loan subsequently for some other purposes.

Please confirm whether I can claim any benefit from the Principal or Interest Paid every year on the Home Equity Loan and how?

FYI, I am claiming tax benefit on my traditional Home Loan every year and submit the Principal & Interest Certificates as proof.

Replies (4)

CA PRADEEP C B

Prop: Pradeep C & Company Chartered Acc

166 Points Posted on 17 May 2017

Section 24 :
purpose of loan : Purchase/ Construction/ Repair/ Renewal/ Reconstruction of a Residential House Property.

deduction allowed is subject to a maximum limit of :
self occupied - 200,000
let out - no limit . full amount of interest.

Section 80C :
purpose of loan: construction or purchase of semi - constructed house and for its further construction.
Deduction for repayment of principal - 150,000 subject to conditions.

Section 80EE:
purpose of loan : purchase of residential house.

deduction in addition to section 24 & 80C

maximum deduction - 50,000 subject to conditions.

if the purpose is not as above mentioned. no deduction will be available.

CA PRADEEP C B

Prop: Pradeep C & Company Chartered Acc

166 Points Posted on 17 May 2017

80EE deduction only for interest on loan.

P P Das (Partha)

3 Points Posted on 18 May 2017

Can I claim IT deductions for both loans and how? You have only stated rules under each section, but please advise whether both loans can be declared?

CA PRADEEP C B

Prop: Pradeep C & Company Chartered Acc

166 Points Posted on 18 May 2017

You can't claim any deduction for home equity loans. it is a personal loan. your house is a security for the loan. the purpose is other than above mentioned. hence no deduction for your home equity loan is available both for payment of interest and repayment of principal.