Section 24 Income Tax Benefit of a Housing Loan

by Manshu on November 30, 2011

in Tax

A house loan repayment has two components – principal and interest – and both of these components are treated differently for tax benefit calculation purposes.

The principal amount is covered under Section 80C and has a Rs. 1 lakh limit. In order to claim the tax benefit under 80C the house should already be constructed, and should be a residential property.

Tax Benefit of Home Loan Repayment Tax Benefit of Home Loan Repayment

Section 24: Tax Benefit on the Interest On Home Loan

The interest on the home loan is treated differently, and Section 24 deals with the tax aspect of the interest on house loan repayment.

The maximum limit under this section is Rs. 1,50,000 and you don’t have to actually live in the house to claim this benefit.

The interest payment is deducted from your taxable income and thus reduces your tax liability. There is no limit on the number of houses you can claim this as well as the location of the houses. The only limit is Rs. 1,50,000 on the whole amount.

There are special conditions like when you get the loan disbursed before the construction of the house and pre – EMI interest and Raag has covered these aspects in a lot of detail in his post about tax benefits of a home loan which you can read if you were interested in those details.

Correction: An earlier version of the article stated that the 80C deduction is only available if you are living in the house. CA Karan Batra notified me that you don’t have to live in the house to claim deduction. Apologies for the mistake. 

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{ 446 comments… read them below or add one }

ashu April 14, 2013 at 4:05 pm

sir plz write more information of repayment of housing loans.

Reply

Manshu April 14, 2013 at 7:21 pm

What type of information are you looking for?

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Utpal Sarma April 14, 2013 at 9:04 pm

I have a home loan from joint SBI savings account for a joint owner flat. The jointly means myself & my wife. She is a house wife.Now my queries is that what benefit I will get under section 24? Is it total benefit or half of the total interest paid.

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s d sharma March 9, 2014 at 6:43 pm

what is the meaning of ‘non self-occupied property’ in u/s 24?

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tax class May 1, 2013 at 3:43 pm

Hi,

if the repayment of housing loan has been done by you only, in that case you can claim the whole benefit u/s 24, however you need to produce the proofs for payment has been made by you, and a declaration from joint owner that payment has been made by you, hence she is not claim any benefit for housing loan.

Thanks

Reply

Vivek May 18, 2013 at 10:19 am

Hi,
My father and I have taken a joint home loan for a completed property. This is my first house purchase and my fathers second. My parents are going to occupy this house and my father’s first house will be put on rent. I live in a different city. Please let us know the maximum that we (my father and me separately) will be able to avail under HRA, 80c and 24. And if there are any other implications.
Thanks,
Vivek

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Lakshmi May 27, 2013 at 1:07 pm

Dear Si,

My question for House Loan (Under Construction) principle & Interest (eligible amount or no limit) taken in Tax calculation of Income from Salary & HRA allowance is eligible or not please inform me..

Reply

Arvinder Singh May 27, 2013 at 2:07 pm

I and my wife have taken up a home loan for an apartment where we are residing right now. The house is in our name 50% each. So we are eligible for IT rebate. I am inquiring about the interest part of the home loan paid till now. The total interest paid is INR 58799 for the last fiscal year. So, both of us are eligible for rebate of INR 29399.5 0 each. Correct?
It says that it can be availed under Section 24 (b). I file my own returns using the income tax department’s website. The excel sheet which I have download from their website does not have Section 24(b) listed. Where should I put this deduction? Please advice. Thanks.

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sukhwant singh May 27, 2013 at 5:19 pm

Can I claim exemption under income tax rules even if the construction of the flat is not complete and possession thereof has not been handed over to me?

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abhishek chandna July 6, 2013 at 2:20 am

same query. Did you get to know the treatment ?

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Jitendra P.S.Solanki June 4, 2014 at 4:32 pm

Sukhwant,

If the house is under construction you can claim only the interest repayment. But this can be claimed only when the construction gets completed and that too in 5 equal installments. However, these installments will fall within the limit of Rs 1.5 lakh Under section 24.

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prita varghese June 11, 2013 at 10:52 am

i am having a joint housing loan with my brother. but the EMI is being fully paid by me and also my brother is not claiming any tax benefit of this housing loan , am i elligle for the full benefit? i no, what is the other option to avail maximum tax benefit. kindly help

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Jayendra Chauhan July 15, 2013 at 9:50 pm

Similar query. However, in my case i am having joint housing loan with my father but the EMI is being fully paid by me. My father being a retired person is not claiming any tax benefit of this housing loan. Am i eligible for the full benefit ?? Also, is there any documentary proof i have to submit to Income Tax towards this for getting the full benefit ???

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patty June 14, 2013 at 11:19 am

Hi,

I have just bought a properties for 39 lac on a joint loan (loan amt 29 lac) with my husband. The said property is under construction and possession of the same would be around Nov/Dec 2013.
The builder has a scheme of 20:80 which we have availed and the 80% loan would start after possession. I just need your clarification for IT benefit. This is my first property purchased however my husband has one flat already purchased before our marriage.. how can we claim IT benefit for the same… It’s a 50:50 loan. Can I take 1.5 l as interest and him unlimited?

thank you

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Lucy Lagachu June 18, 2013 at 3:31 pm

I along with my wife have taken Home Loan jointly more than 25,00,000/- only in the year 2011. At present we are occupying the flat. Both of our names are mentioned in the agreement. We have been paying the EMI in 50:50 ratio. Whether both of us are eligible for availing the income tax benefit of Rs.2,50,000/- each of us on interest as declared in the budget 2013.

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Lucy Lagachu June 18, 2013 at 3:39 pm

This is worth mentioning here that the home loan is our first one.

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Sukhwant Singh July 9, 2013 at 9:17 pm

Is it correct to claim Tax Rebate on Interest on Housing Loan when the construction of the House has not been completed and possession has not been handed over to the claimant?

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Mohit July 19, 2013 at 4:33 pm

Dear Mansu,

Your blog required some modification regarding the tax on interest part as below:-

1) 1.5 lacks limit is applicable is house is self occupied and this can not be spread to multiple home loans since if you declare one that one property as self occupied, IT department will consider only one and you will not get ant tax benefit on other.
2) There is not limit on interest for tax benefit on un-occupied property and it can be multiple properties also but only condition is property should be let out.

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pravin July 27, 2013 at 6:07 pm

Hello sir,

I would like to claim interest paid for my home,
1) could you please let me know which ITR form do I need to use ? ITR-1 or ITR-2.
2) If I need to claim it in ITR-1, I see a row “Income from one House Property” (Cell D42), Do I need to enter -ve value here ?
I have interest paid certificate from SBI do I need to send it along with ITR retrun form to Banglore office ?

Thanks In Advance
Pravin

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Madhab August 13, 2013 at 4:47 pm

Hi All,

We (me & my wife) bought a flat as joint owners. The flat is registered on both our names. We took a loan from LIC Housing finance, my wife is the applicant and I am the co-applicant. The EMI is paid from my savings account (Not a joint account).

Now what is the affect of this on income tax exemptions?

As per section 24B of Income Tax , home loan interest is exempted from tax upto 1.5L. So are we both eligible for 1.5 lakhs each (i.e. combine total of 3L) or we both have to share the exemption to a maximum of 1.5L.

I have searched in internet and found we are individually eligible for 1.5L exemption (total 3L).

I would like to know what is correct. Any one here had similar experience if so what you did?

In my company , the CA is not willing to accept this and saying a maximum exemption limit of 1.5L (we both have to share) is allowed and what I am reading in internet is mere opinions and not the actual law.

Any opinion from you people will be appreciated.

Thanks,
Madhab

Reply

Anshul April 24, 2014 at 4:19 pm

Request you to change you CA immediately. The CA is wrong. If you are a joint owners and have paid 300000 as interest , both of you can claim 150000 each.
I know cause I have claimed the same myself and have filed returns on those basis.

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Harsh November 13, 2013 at 3:03 am

Section 24 deductions on interest of principal is always an icing on the cake for people who want additional deductions apart from sec 80c deductions

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CS GUPTA December 8, 2013 at 10:40 pm

dear sir,
i have taken a flat in delhi through HUDCO loan and paying the EMI of 13480/- pm & Yearly interest component is Rs 90,000/-. This is being adjusted against my Gross income by misusing it. Now from 1-4-2013 i have rented out this flat at 12000/- pm .
Further in April 2013 I have take a Housing loan from a bank & pm EMI is 40,000/- & Interest Component this year is Rs 400,000/-, through Developer Pre EMI Scheme. Developer is paying me an EMI of Rs 45,000/- pm for two year. This year they shall be paying Rs 5.5 Lakh approx
Plz clarify
1. My gross salary shall have deductions of my HUDCO Interest portion (Rs 90,000/-) + Deduction of 2nd Loan Interest component(Rs 4 Lakh) or not?
2. whether the Pre EMI paid by developer i.e 45,000/- pm shall be added up in my Gross along with the Rent of my 1st Flat?
Kindly help me and clarify urgently

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rajendra kumar January 16, 2014 at 8:00 pm

sir please tell me that am i eligible to take income tax benefit if i have taken home loan to construct house but the plot is my father’s name only and he does not take any tax benefit and loan is given against my salary and repayment is done by me only.. please reply

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Jitendra P.S.Solanki June 4, 2014 at 4:45 pm

Rajendra,

To avail the tax benefit on housing loan you need to have certain amount of ownership in the property. If its in your father’s name bank will give you the loan but income tax will not allow you to claim the tax benefit.

Reply

beula February 11, 2014 at 3:21 pm

Sir,
I am a lady .I have bought second home under housing loan .I it is not rented Iam paying EMI for both homes.How should I calculate the tax exemption regarding it

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Jitendra P.S.Solanki June 4, 2014 at 4:54 pm

Beula,

If you have two house one will be treated as self occupied and the other as let out.On the self occupied house you will be able to claim upto Rs 1.5 lakh interest repayment and Rs 1 lakh for 80C. But on second house the exemption will be available for the entire interest repayment.
Take the help of a qualified CA to do the calculations.

Reply

beula February 11, 2014 at 3:23 pm

Sir,
I am a lady .I have bought second home under housing loan . It is not rented Iam paying EMI for both homes.How should I calculate the tax exemption regarding it

Reply

Karthik March 15, 2014 at 1:10 pm

Hi

I took a home loan jointly with my Father. I am the co-borrower & my father is the borrower. I am the one who is paying monthly EMI from my salary. Our employer is requesting for Co-borrower share in the property i.e; name has to be mentioned in the agreement with the shares. But my name is no where cited in the agreement. How do I need to claim for my tax ememption under 80C? If I give the self declaration then it would suffice.. Please confirm

Regards
karthik
9900014571

Reply

Pradeep J Jadhav March 24, 2014 at 12:50 pm

Me and my wife owned a flat for which we have taken a home loan amt. 1975000/- with EMI-22969/- PM
Can we both take tax benefit for the intrest and principle amount?
Is it necessary that the EMI should be deducted from boths accounts?

Reply

Jitendra P.S.Solanki June 4, 2014 at 5:00 pm

Pradeep,

For banks you have to give them a single cheque. But for income tax claim the bifurcation is must. In a joint loan you can claim the tax benefit in the share of the loan borrowed by each. An ideal solution is to repay from a joint account and have a written document mentioning the bifurcation clearly. You can get this done as an agreement. Through this process you both will be able to claim the tax benefit for your share.

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P S NAYAK March 26, 2014 at 3:12 pm

Myself and my younger son have taken a joint HL from SBI for Rs.25 Lacs. and the flat is in our joint names. The possession of the flat has been taken on 01 11 2013. But the same has not been occupied so far due to some furnishing work which is under progress. I was staying in a rented house from 1 04 2013 till 31 10 2014 paying monthly rent @Rs.15000/-. I am staying with my elder son from 01 11 2013 and not paying him any rent. My share of HL interest liability works out to be about Rs. one lac.
Please let me know whether my employer will pass on the HRA benefit on the basis of rent paid receipts from 01 04 2013 to 31 10 2013 and also recokn deduction of Rs.1 lac of my share of HL interest payable to the bank, while calculating Income Tax Liability.

Reply

Jitendra P.S.Solanki June 4, 2014 at 5:15 pm

PSNayak,

HRA benefit and Interest Deduction, both can be claimed.

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ankur sharma April 5, 2014 at 6:05 pm

what effect if two house & interest 4,00,000rs.
1st for self occupied
2nd for rent

Reply

Anshul April 24, 2014 at 4:16 pm

I believe you are wrong in stating that only a total of 150000 can be claimed if you have multiple houses and have multiple housing loans.
As for Section 24 deduction, on your self occupied house you can take advantage of interest payments up to Rs.1,50,000. For the other property, you can claim actual interest repaid, there is no limit for the same. In some places it is mentioned as a max of 250000.
Request you to check the same and come back with the correct information.

Reply

Gayu June 10, 2014 at 4:20 pm

Hi,

The property is in my mom’s name and she applied for a house loan and I am the guarantor for the loan. But I am the one who is repaying the EMI.
Please let me know whether i can get tax exemption for this.

PS: I am having one younger brother and one younger sister.

Reply

Jitendra P.S.Solanki June 10, 2014 at 7:44 pm

Gayu,

You cannot avail the tax exemption. For claiming any exemption you need to have an ownership in the property.

Reply

Gayu June 12, 2014 at 5:24 pm

Is there something like providing power of attorney of the property is possible now to avail the tax exemption eventhough it is owned by my mother?

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Jitendra P.S.Solanki June 12, 2014 at 6:30 pm

Gayu,

Housing Loan tax exemption cannot be availed on power of attorney. You need to have an ownership in the property. Gifting a share in teh property can be one viable option but it will involve certain cost such as stamp duty etc..Much also depends on your bank from where you have taken the loan.Take assistance from a tax expert.

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Ratnakuamr July 5, 2014 at 8:38 am

I my wife and my son has taken jointly home loan and paying 4.5 lakhs per year (Interest 2.5 & principle 2 lakhs) can we all use the entire repayment dividing equally or according to our requirement

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Jitendra P.S.Solanki July 10, 2014 at 4:43 pm

Ratnakuamr,

The home loan benefit can be availed in the ratio of the housing loan availed. However, you will have to prove the repayment which can be done if its done from a joint account. Else only the account holder from whose account EMI is deducted will be able to avail the tax benefit.

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Pranita July 7, 2014 at 6:35 pm

Where to mention the interest paid on Home loan in ITR-1 online form.

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anil jain July 10, 2014 at 4:06 pm

I and my mother jointly name of property what so I got tax benefit

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Jitendra P.S.Solanki July 11, 2014 at 10:36 am

Anil,

Yes you get the tax benefit if you have even part ownership in it.

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Rajesh July 11, 2014 at 10:45 pm

Hi,

how much income rebate I can get under section 24B , if builder delay the construction by more than 3 yrs. For example I take loan in April 2003 and start paying EMI from April 2003 itself, but flat is not in my possession till May 2008. so for FY 2008-09 how much rebate I can get.

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Jitendra P.S.Solanki July 26, 2014 at 6:57 am

Rajesh,

Till the house is under construction you cannot claim any tax rebate. Once it is completed then you can claim the total interest you have paid during underconstruction in 5 equal installments. But this exemption will be within limit of Rs 2 lakh (As per budget provision) under sec 24B.

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Avinash Srivastava July 23, 2014 at 5:17 pm

I and my wife have purchased a flat through Bank Loan. The flat is registered in my wife’s name. But the loan has been taken jointly.My wife is now a housewife and I am paying EMIs. Can I claim tax exemption as my office is denying informing me that the house is not registered in my name.

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Jitendra P.S.Solanki July 26, 2014 at 7:07 am

Avinash,

Yes. To claim tax benefit on housing loan you need to have some ownership in the property.
But you need to check this with a qualified tax expert as in other provisions like capital gains exemptions are provided if the new house on which claim is seeked is purchased in the name of spouse.

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Amit July 24, 2014 at 11:48 am

Bought Home in Noida in CLP plan on 2010 & taken home
loan on 23-10-2010. Closed home loan account on 2013.
Didn’t took any home loan benefit before.
Builder has given possession certificate of 25th March 2014

My question :
Q1. Can I avail the home loan benefit (only interest part) from 2010-2014 which is equal to 1.45 lakh. If i sum up all years interest. If yes can i take it in one shot in this AY 2014-15 or can i claim the intrest only for this year or for this yr + 20% of remaning amount .

My Calculation
Total Intrest = 152424 (from 2010-2014)
-36443 (intrest for 2013-2014)
==========
113557 *20% = 22711 (20% of total remaing amount)

For AY 2014-15 can i claim ? 36443+22711 = 59154 in ITR1 ?

Q2. I guess i have to fill ITR1 in this case as i have only 1 house. By putting -ve value in self occupied property … ?

Thanks.

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Jitendra P.S.Solanki July 26, 2014 at 7:10 am

Amit,

Yes you can claim it but in 5 equal installments in next 5 years starting from FY 2014.

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Jayesh Pawar July 28, 2014 at 9:19 am

Hi,

I have paid Rs. 3,00000/- to the builder as a down payment of my flat.
Please let me know where can I put this amount in Income tax return form?
Note: My EMI is not started yet.

Reply

vikas July 29, 2014 at 11:18 am

i took a self employed professional loan from hdfc bank. using this loan i constructed a residential property over a land that is owned by my father and uncles. can i claim tax benefit under section 24.

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Rakesh Parmar July 29, 2014 at 4:55 pm

Hello,
I have bought a plot on loan (purchase of plot loan from Indiabulls) in May 2014 but I have not constructed house on this plot yet. Hence without constructing house on plot, can I claim Tax exemption on Principal + Interest paid for plot loan repayment? .

Reply

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