Income Tax Exemption on Housing Loan
Tax rebate on home loans means that you can benefit and save significant part of your tax liability if you have taken a home loan.
Interest paid on the home loan
In the budget presented on 28th feb 2013 the interest limit on housing loan has been increased from RS 1.5 L to 2.5 L for claiming income tax exemption
As per Sec 24(b) of the Income Tax Act, 1961 in India a deduction up to Rs. 150,000 can be claimed as tax exemption on housing loan. This deduction is claimed towards the total interest that we pay on the home loan towards purchase or construction of house property while computing the income from house property.
The interest payable before you acquire home or start the construction work would be deductible in five equal annual installments commencing from the year in which the house has been acquired or constructed.
In case of self- occupied property, housing loan tax benefit is allowed only for one such self – occupied property. The interest towards home loan taken for purchase, construction, repairs, renewal or reconstruction of house property is eligible for deduction under section 24(b).
Principal repayment of the home loan
As per the newly introduced Sections 80C read with section 80CCE of the Income Tax Act, 1961 the principal repayment up to Rs. 100,000 on your home loan will be allowed as a deduction from the gross total income subject to fulfillment of prescribed conditions.
Let us consider a hypothetical example.
As per Finance ministers budget speech on 28th Feb 2013:
Your taxable Income: Rs 8,50,000
Principal repayment for the same year: Rs 1,10,000 and Interest payable for the year: Rs 2,60,000
Total Deductions allowed: Rs 3,50,000 (Rs 2,50,000 towards interest payable & Rs 1,00,000 for principal repayment of the loan)
Thus, your taxable income will reduce to Rs 5,00,000 (Rs 8,50,000 – Rs 3,50,000)
Author:
Munish Aggarwal writes on a variety of topics including finance,
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hosing loan is taken by husband and wife both are government servant in the income tax certificate shows both names first of wife and second name of husband. income tax benefit weather 50% sharing can be done by either. weather second name can take full advantage alone?
housing loan is taken by husband and wife both,but husband is a government employee and wife is house wife.The first name is of husband,will husband can get 100% deduction on the principal amount..
yes husband will get full benefit
What are the rules if one takes the house loan for a second house (if already there is one more house owned by the person but the loan for that house is cleared)? Financial advisor, please do advise…
I have a home loan in which i am as a co applicant. the emi amount is paid by me. property is on my mothers name. My mother is having no income. She is a housewife. She is not filling any form 16. Is there any facility like, My mother can give an authorisation saying that the property will belong to me in future so that I can avail the home loan benefits.
Yes you can avail
Hi… I am also facing the same problem but i didn’t get any solution. All banks are saying that u can’t get tax benifit without transferring that home on my name in place of mother’s name. So, Please tell me briefly ..how to get tax benifit if i take loan for a home that is owned by my mother but i have to take loan as a gurranter or as a co- applicant. Even SBI is not ready to make me /co- applicant for that loan. They are making me gurranter and saying that as a gurrenter u can’t get tax benifit.
So, please reply me briefly …I am in big trouble…
“You cannot take tax benefit until the property is in your name”. In other words there will be no tax benefit what may be the criteria of taking loan if the property is not in your name.
i am living in a government accommodation in delhi, my house is not in the same city,but is in NCR teritory,it has not been given out on rent. can i claim exemption on home loan under section 24 . will it be given by DDO or i will have to apply when i file my tax returns.
I and my husband have a house loan in our joint name and the total interest is above 3 lacs Rupees per annum. Are we elligible tax deduction for 1.5 Lac each or only Rs 75000 each since the upper limit is 1.5 lacs
I have house approx.recent market value 15.00 lakhs purchased through total govt. loan of Rs.4.40 lakhs during June’2000.Half of which repaid and taking IT benefit 30,000.00 for principal and 15,000.00 for interests. Now will it be lawfull to take again Rs.10.00 Lakhs house building loan to purchase house/flat for my mother (parents having no income)and at the same time may eligible to take income tax benefit total at maximum limit.
Housing loan is taken by husband and wife. both are working in central govt. departments. Are they both exempted from income tax ? or Any one of them are exempted ?
Yes both can take exemption from income tax
I and my husband have a house loan in our joint name. My husband is an Ex-army and now he is not working anywhere. I am a central government employee and the emi amount is paid by me. I want to know the interest paid by me is fully exempted in my name.
What is the treatment of Stampduty for I T Exemption whether it can be carried forward.
I get a discount of rs 100000 agaisnt purchase of house, they deduct Rs. 10000 TDS and pay me 90000 rs please sugest me this amount is futher taxable. My salary income is more than 1000000. I am waiting for your reply.
Both husband and wife are working in central govt. departments have taken a loan for purchasing a house from LIC Housing Finance Ltd. we understood that both are eligible from tax exemption. Under what rule shall we both get tax exemption ? kindly clarify how much amount of share on both prinicipal and interest shall we both get.
Is sundaram housing finance can be eligible for claiming tax exemption?
yes sundaram housing finance is also eligible for claiming tax exemption
Hi
I am staying in Rented house, I booked a apartment that has still under construction.
should have to claim both Home loan as well as HRA?
Please give me more information.
My salary Income is Rs.6 Lacs I have Hone Loan my as per certificate Rs.1.65 Lacs Interest amount and Rs.65000/- repayment,
Kindly advice for my return of Income–
Can I shown Income from House Properth -150000/- adn sec 80cce Rs.65000
Regards
Mukesg
Hi,
I have taken Housing loan during May 2011,House completed and am paying full EMI since beginnig ,however i have not occupied . am residing in rental house. In this case am i eligible for both HRA exemption and housing loan interest (Rs 1,50,000)exemption.
Please help
house property on wife name she is house wife but house loan taken by husband working in private sactor in bank loan documents borrower is husband and coborrower is wife. may husband can take tax banifit.
im also facing same problem like anil.i am already taken a housing loan from sbi. house property on wife name she is not earning member of the family. the problem is husband is garanter. and he is working in pvt company.now the bank is teling that he is not elegible to get any tax benifit. what husband can do to get a tax benifit from his salary? and we are having joint account in same bank principle and interest is debitin form that account
Two housing loans are availed for two different properties. whether interest exemption can be claimed for both the loans
Dear ,
I have a home loan for which I have got Rs 66000 interest exemption and 55000 principal amount exemtion.
Yet after this I have already paid Rs 1,50,000 as tax.
If I take 2nd home loan and the stamp duty of Rs 1,20,000 is paid. Will this help me to get tax rebate ?
Yes Or No.
Please revert.
Thanks in advance.
My contractor completed constructing my house by mid of March 2012, for which I have a realty and a subsequent housing loan, both from SBI. My contractor has applied for the occupancy certificate from the corporation, but it is unlikely to be received before 31 March 2012. Can I get the IT benefit of the interest paid portion of either or both the loans for the FY ending March 2012? (Realty loan EMIs are being paid since April 2011. Only monthly interests are served on the housing loan so far (March 2012))
Hi
I have taken a home loan for a under construction property. I am yet to get possession and currently I am paying Pre-EMI for the loan
Total amount paid this year is Rs 2,00,000 ( Rs Two Lakhs)
As per tax laws I cant claim rebate under section 24(b) until construction is completed.
However assuming once construction is completed in FY2013-14. I will be able to claim Rs 40,000 ( 2 Lakh/5) next year. But I will also pay another 2 lakh rs in FY2013-14 as interest. So will I be able to claim max of 1.5 lakh or 2.4 lakh or 1.9 lakhs ( 1.5 from current year + 40k from rollover )
Pls clarify
you can claim max of 1.5 lakh in a fiancial year. No roll over.
I’ve taken home loan, but I’ve not yet got possesion of my new home.
I’ve paid Stamp duty and Registration Charges.
Currently I’m staying in a rented home.
Can I claim Stamp Duty and Registration charges for income tax exemption along with HRA.
Housing loan exemption is for interest and principle amount only you have paid for housing loan. If there is no housing loan taken there is no exemption.
My annual income is Rs.4.25 lakh working in central govt organization and my retirement date March 2021 and i am a saving account holder of union bank of india and state bank of india. i have booked flat and i would like to apply for home loan. Which bank is suitable for me to apply home loan? what are the incomtax rebate/exemption on home loan?
Please specify the same.
You can take loan from any bank you feel like as per your convenience.
Hi
I have 3 Questions
I have taken a housing loan on which i am already taking a rebate on Intereset on Housing loan of Rs 1.5 Lacks.Now if i take a second home in my Wifes Name,with i being the co-Applicant,can i take a rebate on Interest of Rs 1.5 Lacks again.
And this home is under construction and will take close to 2 years to complete,Still i will get the interest excemption or there is a seprate calculation for pre construction EMI rebate….on interest
Yes you can take rebate on second loan also. You will get interest exemption on the second loan. Once it gets completed you will have to show rental income from one house. You cannot show both houses self occupied.
If a house has been taken in my and my wifes name can we both seprately claim excemption from Incomtax …..and if yes how much it would be ..would be be Principal-Rs 20000/- and Interest from Housing Loan-Rs 1.5 lacks in ratio of 50% or we can both claim full amount
The total exemption claimed cannot be more than the prescribed limits. However you can decide on the ratio. The amount you claim should have been paid through respective accounts also.
Wrong analysis.
a) Principal is not restricted to 20,000 any longer. You can avail upto INR 100,000 u/s 80C. The ratio in which you share this amount is again to be pre-decided. Since the property is in Joint name what is important to determine whether a Joint Loan has been taken as well and the ratio in which the repayment is made between the husband & wife. In joint loans, it is always better to make funds from a Joint A/c, as it becomes easier to prove contribution ratio. Here are various scenarios:
1) P= 100,000; Sharing ratio =50% between Husband & wife.
Both can claim Rs. 50,000 each u/s 80C in their respective returns
2) P= 30,000; Sharing ratio =50% between Husband & wife.
Both can claim Rs. 15,000 each u/s 80C in their respective returns
3) P= 200,000; Sharing ratio =50% between Husband & wife.
Both can claim Rs. 100,000 each u/s 80C in their respective returns
4) P= 400,000; Sharing ratio =50% between Husband & wife.
Both can claim Rs. 100,000 each u/s 80C in their respective returns, as they are restricted to max 100,000 under that section
5) P= 120,000; Sharing ratio =80%:20% between Husband & wife.
Husband can claim 96,000 and wife can claim 24,000
6) P= 150,000; Sharing ratio =80%:20% between Husband & wife.
Husband can claim 100,000 (although his portion is 120,000, he is restricted to INR 100,000 u/s 80C; and wife can claim 30,000 being her share)
7) P= 150,000; Sharing ratio =100%:0% between Husband & wife.
Husband can claim 100,000 (although his portion is 150,000, he is restricted to INR 100,000 u/s 80C;)
b) Now let’s talk about Interest exmption treatment U/s 24. It is to be treated in the same manner, with the following exception- shown as an example:
1) Int= 180,000; Sharing ratio =50%:50% between Husband & wife.
Husband can claim 75,000 and wife can claim 75,000 as well. They are both restricted to the overall limmit of INR 150,000 under this section.
Additional comments:
AAA) It is important to note that the Principal & interest has to be in the same ratio between Husband & wife. Cannot have a case where Principal is shared 80:20 and Interest: 50:50
BBB) The sharing ratio should remains constant throughout the duration of the loan, unless ownership of the property changes (eg. death of spouse or inclusion of new co-applicants at the time of refinancing or re-registration of property ownership).
CCC) Since the Interest component is higher in initial years and declines as the loan is repaid back, it is recommended that the partner having greater income (eg. Husband) take the majority ratio, to avail greater tax benefits. Focus should be of repayment of principal in initial years so that both H & W can avail max 80C benefits; subsequently as years pass the W gets greater benefits u/s 24.
Regards,
Would some one please send me a specimen of H.B.L certificate required for I.Tax
calculation purpose ?
I had taken personal loan and purchaged a house as bank is not able to give home loan in my house sale aggriment period. am I able to get rebate on personla loan intreset under section 24(b) as I used personal loan to buy house.
I have Two resident Property , one is in Mumbai & second is in Gujrat. i get the housing loan on the both the property. as well as i am staying in Thana district on rental basis.
can i take the rebet in housing Loan of Both the property as well as taking benefit for rent in the FY 12-13?
Taken home loan with my father as co-applicant (to increase loan amount limit).
EMI are paid by only me and Property is only under my name.
Can i claim 100% Principal and Interest exemption benefit.
yes you can do
I am a DDO of my office. Let me clarify as if an employee taken an housing loan in the name of himself and his wife, how the calculation of tax exemption of interest and principal would be calculated in case of wife has no income.
As the wife has no income and the EMI will be paid by the husband only all tax exemption will be availed by the husband only.
I have taken two house loans for the same house, first in 2005 for new construction and second in 2012 for renovation. Can I deduct both the interest amounts from my Income ?
Yes you can do so
Rebate is available only if the house is in yours name. You cannot get loan if you are not the co-owner
Dear Sir
Wrt Sec 24 of HL Interest exemption increase till 2.5 Lacs pa; please clarify if this can be applicable for home loan which I have availed in Dec 2012
This will be applicable for new loans taken in FY 2013-14 only
Hi,
I have 3 house. All three taken with some Loans from bank.
1) House in Bangalore: (Jointly owned by Me and My father) Loan amount 4.5L
I am staying in this house.
P: 96176
I: 71824
2) House in Noida: (Owned soley by me) Loan about 20L
This house is occupied by my Parent (Father and Mother)
P: 100420
I: 245415
3) House in Noida (Under construction, Jointly owned by me and my father) Loan about 6.1 L
P:7358
I: 66226
I have PF payment of around 98K, LIC – 1L. How should the declaration be done?
Currently, I claim tax rebate for house #2, and my father claim tax rebate for house#1. Do i need to show notation rental earning in my tax declaration…
Please guide how do I and my father should file tax returns.
What about those houses which are given on Rent. During the previous Financial Years the 100% reduction was given on the interest paid (Deducting 70% of the Rent Received [-30% goes for maintanance])..
Hi,
I have a joint home lone along with my husband and the loan amount is of 37 lakh.
The contribution is 50%-50% shared among both of us.
In a way, I have taken a loan of Rs 18,50000/- which is below Rs 25 lakh. Same is the case with my husband. As per the declaration in the budget home loans below Rs 25 lakh are eligible for exemption of additional Rs 1 lakh. As per that will both of us be eligible for exemption of Rs 2,50,000/- per year for the home loan interest paid in the financial year.
Please clarify my doubts.
Thanks & Regards,
Supriya
This is valid for only new loans taken in the financial year 2013-2014. As you have already taken the loan, you will not be eligible for this.
As per union budget 2013-14, there is an additional deduction of Rs. 1,00,000 for first time home buyers who taken loan from 1 April 2013 to 31 March 2014.
I am first time home buyer and property is under Rs. 40 lakhs. However, this loan was acquired in year 2010. If I transfer my home loan to a new bank this year, will I be eligible?
Naveen or anyone else got answer on this? If we transfer an exising home loan this year to new lender bank. In that case will I be able to take the 1,00,000 additional tax benefit on home loan interest as per the new rule.
I am a salaried person and have taken a home loan on my name. i am paying 70000 as a interest of home loan. i am staying on a rented house , can i avail HRA & HOME loan interest part exception together.
Yes you can do so if rented accommodation and your own house are located at different places
My home loan is sanctioned & I have taken 2 disbursements. Pre EMI is started Full EMI will be started in 2013-14.
Pls confirm whether I`ll be eligible for additional 100000Rs deduction.
sir,
as per the union budget the the exemption for home loan has been increased to 2.5 lakhs for loans upto 25 lakhs. in case of a joint loan of 40 lakhs where both are husband and wife are equal co borrowers, will each get an exemption of 2.5 lakhs as each has borrowed aloan if less than 25 lakhs for their 1st house??
I took Home Loan for 20 Lakh in Yr 2007. Appx anual interest is 1.7 Lakhs. Now from FY 2013-14, will I get exemption on 1.7 Lakhs? Or I continue geting 1.5 L exemption since my loan is old.
Dear Sir/Mam,
I am applying for a joint loan with my wife for our first house.
The total loan amount is 40 lacs divided equally between us two.
That means each will have a loan of 20 lacs only.
The house will be in joint ownership.
As per the declaration in the budget home loans below Rs 25 lakh are eligible for exemption of additional Rs 1 lakh. As per that will both of us be eligible for exemption of Rs 2,50,000/- per year for the home loan interest.
Please clarify..
I had taken a loan of 9.00 lacks in 2011 for extension of our house, but the property is in my father’s name and he is not working(retired), no sources of income is there for him. I am soley paying the EMI as I am a Co Applicant of loan. Can I avail the TAX benifit for this finacial year??
No you cannot do so as the property is in your fathers name.
I have purchased one apartment and will be jointly registered by me & my wife. To purchase we have taken loan from bank where my wife is working to utilize staff facility. So in the Loan she is the main borrower and I am the co applicant for additional amount. I will be paying part of EMI.
Can I claim or get exemption for principal/interest paid for the amount.
Yes you can do so
I am a government employee. I have purchased a house property on my wife’s name. She is house wife but house loan is taken jointly by both of us (husband and wife). Can I claim exemption of interest paid ?
No you cannot do so as the property is in the name of our wife.
I have a property on my name we are constructing house on that me and my wife are working and planning to take home loan for construction can my claim full tax benifit as i have a seperate home loan ,can you pl advise how the tax exemption can be claimed
I took home loan and house registration was on my father name.can I get tax exemption? and all the EMI are paid by me
Exemption will be available only if the house is in your name.
I own a house in CityA jointly with my wife for which we are already claiming tax exemptions on home loan repayment. I have been living in CityB on rent. Now I have just purchased a house in CityB again jointly with my wife on loan. But I plan to continue staying on rent in CityB since the house I bought in CityB is small for us and is far from my office and let this new house on rent. In this situation, I would like to understand the following:
1) Can we claim tax benefits on BOTH loan payouts (1 lakh in 80C and 1.5 lakh in 24b for both me and wife)? i.e. Total 5 lakhs of deductions.
2) I have two rental incomes now. One in CityA and another in CityB. Will they both be added in our total income in 50:50 ratio? and Will standard deductions be applicable on both these rental incomes separately?
3) Also, with regard to above question, since we (I and spouse) are living on rent in CityB, will we still be eligible for HRA exemptions?
Hi,
Under IT rules for 2013-14, can I avail 2nd home property on home loan meeting below criteria -
> This home is not my prime occupancy but for rental / investment purpose only.
> It will be same city as I am resident of
Am i entitiled for Rs 1 Lakh on principal & Rs 2.5 Lakh on interest exemption? If not, pls clarify.