To understand the key tax benefit on a home loan, we are bifurcating the repayment techniques into four major elements- tax benefits on principal repaid, tax benefits on interest paid, deduction on pre-construction interest and section 80EE income tax benefits.
The Quantum of comcast online internet deals Deduction allowed for payment of Interest on Home Loan under Section 24 has been summarized below:- Quantum of Deduction allowed for Payment of Interest on Home Loan under Section 24 Type of Property Self Occupied Property Not Self Occupied Property Completion Status.
Purchase / Construction of a new House Property Eligibility for claiming Tax deduction Purchase/ Construction should be completed within 5 years Nil Restriction on Sale of Property Nil Tax Deduction claimed would be reversed if Property sold within 5 years Section 80EE: Income Tax Benefit.
Section 24: Income Tax Benefit on Interest on Home Loan.
It is not available to the Successor of the Property.Loan borrowed after for any purpose other than construction or acquisition.Commencing from Financial Year 2011-12 onwards.A very important criterion to be kept in mind while taking a Home Loan is the.Deduction during construction period Interest paid during the construction/acquisition period shall be allowed in 5 equal installment from the last day of preceding Financial Year in which the construction is completed No deduction is available for the principal repayment during the construction/acquisition period.Form 12BB is to be filed with employer if you want your employer to take deduction under this section into consideration and thus deduct lower TDS Case Laws Prepayment charges are also allowed as deduction as interest under section 24b.Section 24 of the income tax act provides deduction in respect of home loan interest.
It can be set off against other income, which includes salary income, in the same year.
Loan Taken on.
This Deduction would be available from Financial Year 2016-17 onwards.So in case youve purchased a property jointly and have taken a joint home loan, each person repaying the amount would be eligible to claim whole deduction separately.These limits of deduction is applicable assessee wise and not property wise.Deduction on Pre-construction Interest, one can also get a pre-construction interest claim from the financial year just like availing the deduction for interest that can be claimed when the construction completes at the starting of the same year.Moreover, if the property is not acquired/constructed completed within 5 years from the end of financial year in which the loan was taken, the interest benefit in this case would be reduced from 2 Lakhs to Rs 30 thousand only.6) Interest on borrowed money which is payable outside India shall not be allowed as deduction under section 24(b unless the tax on the same has been paid or deducted at source and in respect of which there is no person in India, who may.