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. 

{ 9 comments… read them below or add one }

mayuritilak April 9, 2013 at 9:29 pm

sir
salary is rs 750000
housing loan principal rs 25000 pm it is benifical for salary calculation
mediclaim rs 8000
housing loan interest rs 10000 pm it is benificial for salary tds calculation
pl.reply

Reply

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.

Reply

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

Reply

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.

Reply

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?

Reply

Leave a Comment

Previous post:

Next post: