Section 24 Income Tax Benefit of a Housing Loan

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. 

512 thoughts on “Section 24 Income Tax Benefit of a Housing Loan”

  1. 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?

  2. 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?

  3. 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

    1. 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.

  4. 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.

  5. 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

  6. 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…………..

  7. 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

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

  9. 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

  10. 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?

    1. 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.

      1. 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.

  11. 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

    1. 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.

  12. 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.

  13. 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??

  14. 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.

  15. 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.

  16. 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 ?

    1. 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.

  17. 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?

    1. 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.

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

      1. 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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