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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{ 421 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?

Reply

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

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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..

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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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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.

Reply

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?

Reply

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

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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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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

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

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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

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

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

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