Deduction under Income Tax Act 1961: If you are taking a loan from the bank for buying a house property and make the Payment of Interest and Principal Amount on the loan taken for the house property. You are eligible to claim Deduction for Payment of Interest and Principal of House Property under Income Tax Act 1961.
Deduction for Interest Under Section 24(b)
The maximum limit of interest on a loan taken for house property is 2,00,000/ if all of the following conditions are fulfilled.
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- The house property is self-occupied or vacant,
- The loan must be taken for the purchase and/or construction
- The loan must be taken on or after 01.04.1999.
- The purchase or construction must be completed within 5 years from the end of the financial year in which the loan was taken.
If any of the above conditions are not met then the deduction u/s 24(b) will be limited to 30,000/-
The deduction of interest on pre-construction loan taken on house property will be allowed in 5 equal installments from the year which construction is completed.
Additional Deduction of Interest on the loan for House Property under Section Section 80EE
You can claim the additional deduction of Interest on the loan for House Property under Section Section 80EE if the following conditions are fulfilled;
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- The loan must be sanctioned between 01.04.2016 to 31.03.2017.
- The loan taken must be 35,00,000/- or less and the value of the property must be 50,00,000/- or less.
- deduction up to 50,000 over and above the deduction u/s 24(b).
Additional Deduction of Interest is allowed only for the first house property that you buy.
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Deduction on Interest on Affordable Housing under Section Section 80EEA
A deduction for interest payments on Affordable Housing up to Rs 1,50,000/- is available under Section 80EEA. Following are the Condition to claim the Deduction under Section 80EEA.
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- Int. on loan taken is over and above the deduction u/s 24(b).
- Stamp duty value of the house should be Rs 45 lakhs or less;
- A taxpayer cannot avail of deduction u/s 80EEA if he/she has availed deduction u/s 80
- Deduction under Section 80EEA is for the first House Property.
- The loan must be sanctioned between 01.04.2019 and 31.03.2022.
Deduction for Principal Repayment of loan on House Property U/s 80C
The Deduction for Principal Repayment of loan on House Property is covered u/s 80C as per the limit specified under section 80C.
Also check: Computation of Total Income And Tax Payable By An Individual – Step By Step Procedure
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