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. 

{ 115 comments… read them below or add one }

Rohit November 30, 2011 at 7:49 am

Can anyone explain the exemption part with an example ?
Thanks In Advance.

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Manshu November 30, 2011 at 7:39 pm

Rohit – it’s in the post I linked to at the bottom of mine, it has a lot of details and you can go there and check out the examples. I don’t want to duplicate some of the excellent work that Raag has already done in that post.

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Madhav November 30, 2011 at 10:44 am

Rs. 150,000 limit is applicable only in case of self-occupied. If the house is given on rent, limit of Rs. 150,000 is not applicable and can claim any amount as interest

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Manshu November 30, 2011 at 7:36 pm

Great – thanks. This and more details are present in the post I linked to so that’s recommended for further reading.

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sumit May 18, 2012 at 8:45 pm

I have only one house and that is let out, so can i claim deduction more than Rs. 1.50 lacs?

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ann May 23, 2012 at 3:21 pm

An employee can claim maximum Rs. 1,50,000/- tax benefit under section [24b] or which ever is less on self occupied house well if he owns another house and declares rent and has a house loan repayment for the second house also after considering the muncipal taxes paid and a standard deduction of 30% towards repairs and renewals he can claim rebate on the interest repayment which is unlimited but my question to you is, is it over all limit of Rs. 150,000/- for both houses or in addition to this 1,50,000/- for self occupied house can he claim rebate on the second house please clarify.

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VRT November 30, 2011 at 10:48 am

Dear Sir, Please advice if there’s tax benefit, if i am living in a rental apartment ?

thanks & Regards,

PS: Appreciate your site and the wonderful information you are giving, thanks

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Manshu November 30, 2011 at 7:36 pm

I can’t think of anything besides the HRA thing – that you would be aware of I guess.

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VRT December 1, 2011 at 12:33 am

Cud u please explain HRS ?

thanks

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VRT December 1, 2011 at 12:33 am

sorry hra…

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Manshu December 1, 2011 at 4:52 pm

You probably don’t get HRA as part of your salary and if you do then that’s one thing that automatically leads to some tax reduction. There is no additional investment you have to make. You can read this article here:

http://www.onemint.com/2007/03/21/treatment-of-hra/

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Jitendra P.S.Solanki March 19, 2012 at 10:33 am

There is a section 80GG which gives you deduction on rent paid for residential accomodation if one is not entitled for any HRA benefit from employer or a rent free accomodation.

The deduction is minimum of :

1. Excess of rent paid over 10% of Adjusted Total Income
2. 25% of adjusted total income
3. Rs 2000 p.m.

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Rohit November 30, 2011 at 11:06 pm

yeah than Q i have it cleared

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Manshu November 30, 2011 at 11:16 pm

than Q?

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ila February 17, 2012 at 3:09 pm

Whether i can get benifit of 80C for principal value of House loan & 24 for intersest toghether.that means my total tax benifit will be 100000+150000,is it true

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Manikaran Singal March 15, 2012 at 8:31 pm

Yes ila. You can take both the benefits

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Paban Kumar Medhi February 21, 2012 at 3:40 pm

I have a home loan account jointly with my wife as co applicant. My wife does not claim any income tax benefit. Shall I get only 50% benefit U/s 24(i).

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Manikaran Singal March 15, 2012 at 8:51 pm

If your wife is earning and files her income tax return, then yes you can claim only 50% benefit u/s 24(i), but if she’s not working but is only a co applicant as she’s the joint owner of the house, then you can claim 100% benefit.

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Seema February 29, 2012 at 2:26 pm

Hi Sir,

your article is very informative.
I have couple of queries
1. If we are paying an Interest of 2, 80,000.
Can I claim Rs. 15 L income tax benefit and my husband 1.3L tax benefit.
-House is on joint name
-Loan account in joint name
-EMI payment also goes from the joint account.

2. Can house maintenance, house tax paid comes under
Net Income / (Loss) from House Property which includes 1.5L of interest as max.
So income from house property will be the -(sum of interest+ maintenance + house tax)
Please let me know.

Regards,
Seema.

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Jitendra P.S.Solanki March 19, 2012 at 10:40 am

Seema,

Ownership of the house makes one eligible for the tax benefits that can be claimed by an individual but in case you are just a co-borrower and not the co-owner in a joint loan then tax rebates cannot be availed by you. Conversely if the co-borrowers are co-owners of the property then the tax rebate will be available in the proportion of their share in the loan. Hence repayment capacity of each co-borrower should be considered before deciding on the share of a loan. If the co-owners are equal owner of a property but if the share of a loan is 2:1 then the tax benefits will also be availed in the same ratio.

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smita March 15, 2012 at 4:33 pm

If the person paying extra for repayment excluding EMI, let me know weather this repayment will be deduct from his taxable income.

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Manikaran Singal March 15, 2012 at 8:44 pm

Yes smita, as paying extra amount reduces the principal amount of loan so this payment comes under the section 80C and you can claim benefit upto the overall limit of Rs 1 lakh.

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Amit March 15, 2012 at 9:42 pm

I have taken home loan of rs 20 lakh in which 5 lakh is margin money.can i get tax rebate for margin money like principle interest?

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Manshu March 19, 2012 at 4:47 am

Can you elaborate what you mean by margin money please?

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Jitendra P.S.Solanki March 19, 2012 at 11:10 am

Amit,

You are referring to downpayment.No you do not get tax benefit on downpayment amount since it is not counted in home loan.

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Satish Chugh March 22, 2012 at 10:02 am

My wife and her widowed mother are co-owners of a property and are co-borrowers as well of the housing loan. However we don’t know what is the share of the loan for each of them. How can I know that?

Further the mother retired in Oct 2010 and since then residing in the said property. All the EMIs till date have been paid by my wife from her account (however a prepayment was made last year by my mother in law). So can my wife claim 100% of tax benefit arising out of the interest paid.

Finally thanks for the very informative post!

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Manshu March 24, 2012 at 11:47 pm

The bank should provide that information surely, how else could you find it out? I can’t think of any other way.

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sameer March 30, 2012 at 3:41 pm

hi,
had a query with respect to the interest deduction.

if money is borrowed for construction/purchase of house under construction, is there any deduction for interest during the construction period. or will it be aggregated till finish of construction and then allowed as deduction over the next 5 years?

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Jitendra P.S.Solanki April 17, 2012 at 11:03 pm

Sameer,

The deduction of interest payment during construction period is available only after the posession of house in 5 year equal installments.

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srivatsan April 2, 2012 at 2:44 pm

i have a flat at chenni, and i got retired on 30th sept2011 till retirement i was paying emi instaments from my salary. On retirement with my retirement benefits i have closed my housing loan fully. since i am bank employee i have availed my housing loan on funded interest method(principle paid first and then interest portion). am i eligible the this interst portion under sec 24 of incometax act , (i purchased the flat in the year 1997)and my instalment started in the year 1998 after mortorium period.kindly enlighten me.

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Jitendra P.S.Solanki April 17, 2012 at 11:22 pm

Dear Srivatsan,

If you have availed housing loan from a notified institution then you are very well eligible for interest exemption.You can also verify from the institution as every bank.FI which gives housing loan also gives to the buyers interest deduction certificate.

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Tricia April 2, 2012 at 4:25 pm

Hi,

I need some explanation on the following.

1. My husband and I have taken a joint loan of 20 lakhs in Aug 2011, we both along with his father is the co owner of the flat. Will Me and my husband can get tax benefit or can only 1 avail of it.

2. Secondly we are paying an high interest rate on 20 lakhs, if we pay 5 lakhs to the bank as prepayment how it work? will it help me in anyways to pay the amts in bits. Total amt that gets deducted every month is 26K out of which 22K goes in Intrest and 4 towards principal

3. Please explain the prepayment procedure or table of home loan. I have to pay prepayment charges o f 2 % to my bank if I prepay the home loan.

Please assist me what can I do??

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Jitendra P.S.Solanki April 17, 2012 at 11:44 pm

Tricia,
1. You both can avail the tax benefit in proportion of your ownership

2.Even if you prepay the interest component still remains the same.the strategy is more useful to reduce the EMI burden.

3.The prepayment charges are on the outstanding amount as on date.

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Puneet April 4, 2012 at 12:54 pm

Hi ,

I had just gone for a Home Loan of 25 Lakh and flat is under construction.
Could you guide me if I’m eligible for HRA and Interest Rebate(Under Section 24) both.
Or
I’m eligible for one out of two above?
Or
I have to wait for its completion until I can get benefits said above and how it will go then?

Thanks
Puneet

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Jitendra P.S.Solanki April 17, 2012 at 11:47 pm

Puneet,

You cannot avail both. Since the flat is under construction you can avail HRA benefit till you get the possession.The interest for construction period you can avail the deduction in five yearly equal installments once after you get the posession of house.

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Puneet April 4, 2012 at 1:01 pm

To add further I had purchased this Flat on Down Payment basis means on 95% of payment is down to builder(Mine part and Loan part by bank). Only 5% plus other small charges needs to be paid after possession.

Regards
Punet

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H.J.Fernando April 4, 2012 at 2:03 pm

If I have already paid the tax for the interset part of housing loan, Can I file a refund latter !?

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Jitendra P.S.Solanki April 17, 2012 at 11:48 pm

Fernando,

Yes you can claim refund when you file your ITR.

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Shakuntala April 13, 2012 at 12:54 pm

If an NRI goes for joint homeloan with resident spouse and both are the co-owners of the house, then resident partner can claim tax benefit on the part of EMI and principal amount he has contributed towards repayement of the loan? To claim tax benefit what is the procedure? whether the loan EMI has to be paid through NRO account. What if the loan goe through NRE account and resident partner pays his EMI to NRI spouse by depositing in NRO account.

Awaiting for the reply.

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Jitendra P.S.Solanki April 19, 2012 at 11:51 am

Shakuntala,

Yes Resident partner can claim tax benefit towards repayment in proportion to the share in property. However, it will be good if the loan repayment can be done through partners account and NRI transfer the funds of his share.Otherwise, transferring the payment to other account does not make eligible for claiming housing loan tax benefit.

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Shilpi April 17, 2012 at 1:11 pm

I will buy a ready to move in flat during April 2012 using 80% home loan and occupy the same by Jul 2012 from currently rented flat. Can I claim HRA deductions till Jul’12 and interest amount rebate on home loan between Jul’12-Mar’13?

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Jitendra P.S.Solanki April 18, 2012 at 11:01 pm

shilpi,

You can claim HRA benefit till the time posession of house is not given to you.

Any interest repayment during this period can be claimed in equal installments in subsquent years after the possession of house.

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Rajesh sharma April 18, 2012 at 11:26 am

I have purchased the flat in the name of my wife but homeloan is in my name she is house wife
can i will get home loan interest rebate.pl suggest

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Jitendra P.S.Solanki April 18, 2012 at 10:58 pm

Rajesh,

You have raised a very interesting question. Under Section 64(i) (iv), the income arising to the spouse of the assessee from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideration is clubbed as the income of that individual. In simple English it means that the income arising out of the house that is purchased from the cash gifted by you shall be taxed as your income.

Hence, tax benefit should be available.

But i am still not clear how you got a loan on any property which is not in your name.?

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Rajesh sharma April 27, 2012 at 9:19 am

thank you very much for your comment and I got the loan as she is co applicant I am main applicant loan is taken from HDFC

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Ashok April 19, 2012 at 12:47 pm

Dear sir.I would like to ask you that i am having LOAN FREE HOUSE. If i will take loan on this property for reconstruction/ maintenance, THERE IS ANY TAX BENEFITS ??
REGARDS

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Ashok April 24, 2012 at 1:36 pm

No sir, it is not second house.I have purchased it in cash.
Now i would like to take loan for maintenance 7 reconstruction.There is any tax benefits ? Regards

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Arvind April 20, 2012 at 1:25 pm

Sir Kindly let me know whether IT benefit is available for 2nd housing loan or not?
Kindly let me know.

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Manshu April 22, 2012 at 8:36 pm

Is the second loan for a second house? That’s what it looks like – can you detail out your situation please.

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Ashok April 24, 2012 at 1:39 pm

No sir It is not second house.We have purchased in cash. Now we are need loan on it for reconstruction & maintenence. There is any tax benefit if i take loan??

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Jitendra P.S.Solanki April 25, 2012 at 10:34 am

Ashok,

If you have already a house and buying any loan on it, then its Loan against property and not a home loan.You do not get any tax deduction in Loan Against property.

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Ratish April 23, 2012 at 8:41 pm

I have taken a home loan of 20 lakhs and my EMI starts in April. Me and my wife are co-owners of the apartment and co-applicants in loan. She is a housewife so could i avail of the entire 1 lakh principal + 1.5 lakh interest exemption? Do i need to sign an agreement to show that i would be paying the EMI’s? What all are the legal formalities?

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Jitendra P.S.Solanki April 25, 2012 at 10:32 am

Ratish,

Although the tax benefits are available in the ratio of the share of each individual in the home loan, to avoid future hassles the share of the home loan and other such details should be put on the stamp paper in the beginning only. Also every borrower has to provide a copy of the borrower certificate to claim their respective tax relief. Two separate copies of such certificates along with a copy of the agreement signed between the two co-borrowers would be needed to file for tax benefits. There are chances that either of the borrowers misses on the tax rebate, so in that case one can claim it as a refund at the time of filing tax returns.

In case if you are availing the full deduction then you will have to get a declaration from your wife of not aviling any tax benefits.To show EMI payment,opt for your bank account.

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shama April 24, 2012 at 5:55 pm

according to the bankstatement i payed 47000/Rs (both principal or interest) during the year 2011-12 does these whole amount calculate income tax rebate ?

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Jitendra P.S.Solanki April 25, 2012 at 10:29 am

Shama,

Yes this amount is fully deductible from your income under two section -80C & Sec 24.

But you need break up of amount within these sections as their deduction heads are different. Also Sec 80 C you might not be able to avail if you have made other investments upto Rs 1 lakh and you have to show both the deductions under seperate heads while filing your returns.

Banks generally give break up also when they send you Tax Deduction Certificate.

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Rajesh sharma April 26, 2012 at 9:25 am

please suggest me :I have taken the home loan in my name and i am repaying the loan but the property is in my wife’s name she is not working can i get rebate in income tax.

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Jitendra P.S.Solanki April 27, 2012 at 10:25 am

Rajesh,

If you are not the owner of property then home loan tax benefit is not allowed.

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Gourav May 1, 2012 at 2:07 pm

Sir,

I have taken a home lone worth 25 lacs in feb 2011 and satying in same house for long now. Need your expert advise to know that during this current financial year what should I put in my TAX declaration. Should I use HRA as tax saving element as i give 20 k per month to my mother or should I use home loan for tax rebate. my HRA amount is 18892 per month.

Also is it possible for me to claim both.

The house where we live in is in name of myself and my mother and i have a running loan of 25lacs.

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Jitendra P.S.Solanki May 1, 2012 at 9:46 pm

Gourav,

You cannot claim for HRA if you have a self occupied house.

Hence, claim for loan benefit.

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Saravanan S May 3, 2012 at 9:28 pm

I have taken a home loan in my wife’s name.I am the co -applicant.We registered the property in my name and in my wife’s name.My wife is working .

Now the questions are

1) Shall I (Co applicant ) avail the 100 % tax benefit?( 1 Lakh and 1.5 Lakhs)

2) Reallhy my wife doesnt want to avail the tax benefit since i am in 30 % tax slab and she is in 10 % tax slab.So how to get 100 % tax benefit for me??

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Jitendra P.S.Solanki May 4, 2012 at 12:04 pm

Saranavas,

You can take 100% benefit.In that case your wife will have to give a declaration in writing that she is not taking any benefits from this loan.

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janaki Cardozo May 4, 2012 at 11:27 am

Dear sir,
I have taken a housing loan for 50 lacs. How much tax benefit can I expect. I come under 30% tax slab .I have a life insurance for rs.60000. Every month from my salary rs.13360 is being deducted as tax. Please advise as to where all i can invest to avoid this amount getting deducted from my salary every month.

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Saravanan S May 4, 2012 at 1:20 pm

yearly i am paying 90,000 as principal and 4,20,000 as interest.Shall

I claim 45,000 + 1,50,000
Wife – 45,000 + 1,50,000

if we use 50 % + 50 % share.

Please suggest

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Jitendra P.S.Solanki May 4, 2012 at 10:53 pm

Saravanan,

Any individual can claim upto maximum limit only i.e. Rs 1 lakh under sec 80C and Rs 1.5 lakh as interest. You cannot claim more than this .

Hence if you utilize your wife share then only you both will be able to claim higher.

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Mania May 7, 2012 at 2:32 pm

dear Sir,
I have purchased one house in my wife’s name, who is house wife,and staying in same house and the house is insured in my name. The EMI is going from my salary, whether I will get in-come tax benefit ? if not then whether i will get HRA benefit?

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Jitendra P.S.Solanki May 7, 2012 at 9:43 pm

If your wife is the sole owner and home loan is on your name then you won’t be able to avail tax benefit.You need to be co-owner of property if not the full owner.

HRA benefit also cannot be availed as you are staying in house and Rent to spouse is not considered by income tax.

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Sudhindra May 24, 2012 at 4:43 pm

Hey. I think you can give rent to your wife. But the same has to be reflected in her tax statement. I have read it somewhere. Please correct me if I am wrong.

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sameer ranade May 8, 2012 at 10:22 am

hi i had a few questions relating to income from house property:
1) for section 24 (b), if i have two houses with one utilised as self occupied and the other as deemed let out, then can the interest on capital borrowed for the self occupied house be used as deduction for the deemed let out house property?

2) if i have a self occupied property, then annual value is nil. in that case can i still deduct interest on borrowed capital to get a negative net annual value, which can be set off against other sourcesof income?

3) does house property also include other commercial property like warehouses, shops, commercial establishments?

thanks in advance
sameer

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bhakti May 10, 2012 at 4:29 pm

in case of deemed to be let out property what would be the interest deduction on home loan
u/s 24?

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GIRISH BURANDE May 12, 2012 at 4:26 pm

SIR, I PURCHASE FLAT IN JOINT NAME WITH MY WIFE,WIFE IS WORKING IN GENERAL INSURANCE AND I AM WORING IN PVT LTD COMPANY. HOUSING INT AND PRINCIPAL EMI GOES FROM MY SALARY ACCOUNT ONLY, CAN I TAKE ALL THE INCOME TAX BENIFIT AGAING INTEREST AND PRINCIPAL

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Jitendra P.S.Solanki May 15, 2012 at 5:02 pm

Girish,

Yes you can take the full deduction.Your wife will have to give a declaration in writing that she is not availing any tax benefit.

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deepak mathur May 13, 2012 at 9:23 am

sir ,
i have taken home loan for construction purpose from HDFC BANK. The property owner is my mother and i m paying the loan amount . so can i get income tax rebate.?

PLZ REPLY FAST…………..

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Jitendra P.S.Solanki May 15, 2012 at 5:03 pm

Deepak,

If mother is owner of your property then you cannot claim the tax benefit on home loan.You need to be co-owner in property to avail the benefit.

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Rakesh Kanugo May 17, 2012 at 7:35 am

thank u sir

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Rakesh Kanugo May 13, 2012 at 9:36 am

sir ,
i want to take home loan for construction purpose from SBI BANK. The property owner is my mother and i m paying the loan amount . so can i get income tax rebate.?
IF NOT THAN SUGGEST ME OTHER OPTION

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Jitendra P.S.Solanki May 15, 2012 at 5:04 pm

If mother is owner of your property then you cannot claim the tax benefit on home loan.You need to be co-owner in property to avail the benefit.

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Rajesh May 14, 2012 at 6:55 pm

Sir,

I have taken a home loan jointly with my wife and purchased a flat (Under construction at that time ) and opt down payment option and paid to the Builder. My wife is also co owner in the property and she is not earning now. I am paying 100% EMI from day 1. Can I take the 100% tax rebate ? Till time registry is pending.

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KP May 15, 2012 at 9:43 am

Very Terse and Effective explanation!! Thanks a ton!!

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Rahul Jain May 17, 2012 at 4:44 pm

Hi,

I have taken a loan for house purchase from a relative at 12% per anumm. So the interest that i have paid to him is tax free or not. Can anyone please suggest?

If yes then please suggest the section.

Regards,
Rahul Jain

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Jitendra P.S.Solanki May 18, 2012 at 1:39 pm

Rahul,

Interest payment to friends and relatives can be claimed u/s 24 but only against a certificate received from them. In the absence of the certificate, you would not be eligible for the deduction. The recipient of interest income who issues the certificate is liable to pay tax on the interest income that he receives. As far as the principal payments are concerned, they would not qualify for tax benefit as loans only from notified institutions and banks are eligible for such deductions.

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mania May 17, 2012 at 5:00 pm

tahnks for your feedback,
the home is in my wife’s name and EMI is going from my salary, where i am not getting tax benifit, if we will shift to rented home, then can i avail HRA benifit?

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Jitendra P.S.Solanki May 17, 2012 at 10:59 pm

Mania,

Both benefits are not allowed simultaneously.

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Mania May 18, 2012 at 1:25 pm

thanks for prompt reply,
sir, i am not getting a single benefit, because the home is in my wife’s name and when we are staying in same room, so HRA is not eligible. my question is that if we will shift to other rented room, whether i will get HRA facility and my wife will do return file, what ever rent she will receive.
And second thing, the home loan is in my name, the bank statement is coming in my name, only registration is done in my wife’s name.
third is what is the process of co-occupier, in co-occupier, can i get tax benefit?

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sumit May 18, 2012 at 8:54 pm

I have only one house and that is let out, so can i eligible for interst deduction for more than Rs. 1,50,000/-

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Jitendra P.S.Solanki May 22, 2012 at 6:56 am

Sumit,

On first house you can claim only upto Rs 1.5 lakh.

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sumit May 22, 2012 at 8:35 pm

Hi Jitendra,

I had read the sec 24 wording but it not specifically written.
Can you throw some light on it?

Thanks

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Jitendra P.S.Solanki May 25, 2012 at 8:43 am

Sumit,

If your property is let out then you can very well claim deduction on interest repayment without any limit. i.e. there is no limit on interest deduction for let out properties.However, your rental income will be taxable.

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Shakuntala May 19, 2012 at 9:42 am

Hi,

I and my Husband are co -owners and he is the co – applicant of homeloan taken recently.
The EMI will start from next month and EMI will go from my account and he will transfer 50% of the EMI amount to my account every month. In this case can he claim tax benefit upto 50% of the contribution or should he be the joint account holder of the account from which EMI goes out.

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Jitendra P.S.Solanki May 19, 2012 at 4:57 pm

Shakuntala,

Wiser choice would be to either have a joint account as transferring funds does not make you eligible for tax benefit.

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Aditya May 19, 2012 at 9:23 pm

I co-own a house with my parents but there is no loan. The house has been bought free and clear.

If I buy a second house on loan, would I be eligible to rent it out (really or nominally) and claim rebate on the full interest of the home loan?

Thanks,
Aditya

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Jitendra P.S.Solanki May 21, 2012 at 10:05 am

Aditya,

Yes on second property you can claim the full interest amount for deduction.

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Aditya May 21, 2012 at 10:25 am

Thanks for the prompt reply.
Aditya

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Mania May 21, 2012 at 4:27 pm

Dear Mr. Solanki
sir, i am not getting a single benefit, because the home is in my wife’s name and when we are staying in same room, so HRA is not eligible. my question is that if we will shift to other rented room, whether i will get HRA facility and my wife will do return file, what ever rent she will receive.
And second thing, the home loan is in my name, the bank statement is coming in my name, only registration is done in my wife’s name.
third is what is the process of co-occupier, in co-occupier, can i get tax benefit?

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Jitendra P.S.Solanki May 22, 2012 at 6:55 am

Mania,

Its difficult to get a tax benefit when property is in somebody else name and loan is in your name.If you have made yourself a co-owner during registration of property then you would have availed the benefit.
If you shift to a rented house, you can claim HRA benefit even if you are paying a housing loan.

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Pravin D May 22, 2012 at 11:36 am

Dear Sir,

my friend is staying in one house with parents. He booked another house which he will get possession in next 2 years. Now he want to book another house which he will be getting in
next 6 months. Whether we will get benifit for 3rd house ? if Yes , How ?

Regards

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Jitendra P.S.Solanki May 23, 2012 at 7:31 am

Pravin D

Contrary to popular opinion, there is no overall restriction of Rs. 1, 50,000 on the interest payable on a loan taken to acquire/construct a house property or in respect of more than one property. In fact, this deduction is available for any number of properties and is without any limit under specific circumstances.

The calculation of income from house property (which means the rent you earn) has to be done separately for each property owned by a person. Home loan repayments are eligible for deduction for each such property.

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Ankush Jain May 22, 2012 at 3:51 pm

Dear Mr. Solanki,
My dad and I jointly own the house and we have jointly opted the home loan. I pay EMI thro’ my account and have submitted NOC (that my dad is not availing any tax benefit from the said property) to my employer. They have considered my entire contribution and same is getting reflected in my Form 16 as well.
For AY 2012-13 when I am filling ITR2, there is a field which asks whether House Property is co-owned? and how much is the contribution? I cannot put 100% contribution in my name, since it is not allowing me. If I put 80:20, still the tax calculation doesn’t change, because I am putting the exact information as per Form 16. Please do let me know, if I am mistaking any bit here?

Thanks in anticipation,
Ankush

Reply

Jitendra P.S.Solanki May 23, 2012 at 7:33 am

Hi Ankush,

Haven’t gone through this information.

Give me a day or two, will reply to your query

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Ankush Jain May 23, 2012 at 9:16 am

Sure, Thaks.

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Ankush Jain May 25, 2012 at 8:49 am

Sir, any further update on my query?

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Ankush Jain May 30, 2012 at 11:17 am

Sir, please respond.

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Jitendra P.S.Solanki May 31, 2012 at 9:11 am

Ankush,

I am still not able to get the query resolved.I have to consult a CA on this matter.Will ensure i reply your query by EOD.

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Ankush Jain May 31, 2012 at 3:22 pm

Thanks a ton! Much appreciate this.

If you can answer this as well please?
Is there any provision of tax saving on the second home-loan, where the property is under construction. Also, the first home-loan is still outstanding.

Thanks,
Ankush Jain

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Akshay Thakker May 23, 2012 at 6:35 pm

In case I am buying a second home ,which i do not plan to rent out. How is the deemed rent calculated? Is there a ready reckoner?
For illustrative purpose, lets say I buy a second home which costs 10LAC and the annal interest on it is 120,000.00. Can i say that the rent income from this property is inr 30,000 per year (at 3% yields as are currently prevalent)?
Thank you,

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Jitendra P.S.Solanki May 25, 2012 at 7:23 am

Akshay,

Generally, the rent is calculated on the basis of annual rental value fixed by the local Municipal authority on basis of which they charge municipal/house taxes. However, if there is a Rent Control act and a standard rent is fixed for any location, then this become the maximum rent one can charge and so will be considered while computing deemed rent.
There is no defined formula and you need to get information on these two aspects.

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ankit May 24, 2012 at 8:04 am

sir i have two hosing loan from two different bank on same property,kindly tell me can i claim the benefit of 80c on both housing loans

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Sudhindra May 24, 2012 at 4:49 pm

How did you get that? Its illegal to have loan from two banks for the same property. You actually need to submit all property papers to the Bank from which you borrow loan. Obviously, if you take loan from two banks, both the banks will not be able to have all your property papers. Bank obviously will not disburse loan amount unless they have the papers.

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ankit May 25, 2012 at 1:10 am

sir,
the loan gien by second bank is on the guarantee of first bank.

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Jitendra P.S.Solanki May 25, 2012 at 7:26 am

Ankit,

Are these two loans of same amount for full value of property?

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Sudhindra May 24, 2012 at 4:52 pm

Section 24B is actually dead investment. As per my knowledge, you can even mention loss in share trade in that section. However, I have a question. I have a land loan for which 80c is not applicable. Can I get 24B exemption on this?

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Rahul Jain May 24, 2012 at 5:44 pm

Thanks Jitendra for the answer.

I have received a proper certificate from my relative about the interest that i have paid to him. So now i am eligible for tax benefit? Please suggest

Regards,
Rahul jain

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Sudhindra May 24, 2012 at 7:30 pm

I don’t think so. Loan from financial firms (That too only home loans) will be considered for tax rebate. Loan taken from individuals will not count.

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Jitendra P.S.Solanki May 25, 2012 at 6:51 am

Rahul,

Yes you are eligible for the interest you are repaying. As said earlier you cannot clam section 80C under this.

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Sudhindra May 25, 2012 at 8:12 am

Hi Jitendra,

Do you mean, interest paid on any loan is eligible for IT rebate under 24B? This was my question actually. I have a land loan for which I cannot claim 80C rebate. I am thinking whether it is possible to claim 24B for interest paid!! You have mentioned above that certificate from relative is sufficient for claiming 24B tax rebate. Then I hope it should also allow for other loans – like Personal loan etc. Please clarify.

Regards,
Sudhindra

Reply

Jitendra P.S.Solanki May 25, 2012 at 9:00 am

Sudhindra,

Under section 24 you claim deduction on home loan taken from relatives also.However only the interest is eligible as section 80C is only from a specified institution.

Since, there are no tax benefits provisions on personal loans so you cannot claim it from anywhere.

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