There
\nare various ways to save tax by taking housing loan. We can take tax benefit on
\nhousing loan under section 80C, section 80EE and section 24.<\/p>\n
1. <\/p>\n <\/p>\n <\/p>\n <\/p>\n \u00a7 What is the maximum limit of deduction u\/s 80C?<\/strong><\/p>\n The maximum deduction allowed u\/s 80C is Shall I buy partly-constructed Deduction There 1. 2. <\/p>\n There 1. 2. <\/p>\n \u00a7 Is there any circumstance, the effect of If taxpayer transfers the house property on which he has claimed tax deduction u\/s 80C 2. This section provides tax benefit on home loan for payment of \u00a7 What is the limit of deduction u\/s 24?<\/strong><\/p>\n <\/strong><\/p>\n In <\/p>\n What <\/strong><\/p>\n Deduction is only available if following three conditions are satisfied<\/p>\n 1. 2. 3. <\/p>\n If above conditions are not satisfied and loan is taken for purpose <\/strong><\/p>\n <\/p>\n <\/p>\n There Please note:<\/strong><\/p>\n \u00b7 <\/p>\n <\/p>\n <\/p>\n In \u00d8 If the loan is taken for Repairs\/ Renewal\/ Re-construction:<\/p>\n No tax deduction is \u00d8 If The For 3. This is the new section inserted in the Income Tax Act applicable <\/p>\n <\/p>\n a) The assessee is an individual.<\/p>\n b) He has taken a loan from a financial institution. Financial c) The loan has been sanctioned by the financial institution d) The amount of loan sanctioned for acquisition of residential e) The value of residential house property does not exceed Rs. f) The assessee does not own any residential house property on After knowing the conditions of section If For Kindly note<\/strong> Whether HRA exemption is available along with deduction under section 80C?<\/strong><\/p>\n If taxpayer is living in a rented premise and is claiming <\/p>\n
\n<\/strong>Benefits
\nunder section 80C:<\/strong><\/p>\n\n
\nand Hindu Undivided Family.<\/li>\n
\ninstallment on repayment of housing loan. The Installment consists of principal
\namount and interest amount. Only principal amount is deductible under section
\n80C. Loan can be taken from Nationalized, private or co-operative bank.
\nDeduction is also available even if loan is taken from Life Insurance Corporation,
\nNational housing Bank, taxpayer\u2019s employer where such employer is public
\ncompany, university or co-operative society.<\/li>\n
\nalso allowed as deduction under section 80C. Kindly note that deduction of
\nstamp duty and registration fees is available even though taxpayer has not taken
\nhousing loan.<\/li>\n
\nbasis. If installment is due but not paid during the financial year by taxpayer
\nthen he cannot claim deduction. But he can claim deduction in the financial year
\nin which he actually paid the installment amount.<\/li>\n<\/ul>\n
\nRs.1,50,000. (This limit is applicable form financial year 2014-2015, earlier limit
\nwas is Rs.1,00,000) Kindly note that this deduction is the total of deduction
\nallowed u\/s 80C and includes amount invested in Provident Fund A\/c, Tax saving
\nFixed Deposits, National Saving Certificates etc.<\/p>\n
\nhouse property or fully constructed property?<\/strong><\/p>\n
\nof home loan u\/s 80C for repayment of principle part of home loan is allowed
\nonly after the construction is complete and the completion certificate has been
\nawarded by local authority. No deduction would be allowed under this section
\nfor repayment of principal for those years during which property was under
\nconstruction.<\/p>\n
\nare two benefits of purchasing fully constructed property.<\/p>\n
\nService tax is not levied on the property which is
\nconstructed fully.<\/p>\n
\nYou can take the deduction of principal amount of your
\ninstallment immediately after the repayment of installment amount. <\/p>\n
\nare also two benefits for purchasing partly-constructed property.<\/p>\n
\nPrice of party constructed property is less than fully
\nconstructed property. <\/p>\n
\nYou need not required to pay whole amount of the property at
\nthe time of acquisition of house property. <\/p>\n
\nwhich will be the withdrawal of deduction u\/s 80C?<\/strong><\/p>\n
\nbefore the expiry of five years from the end of the financial year in which the
\npossession has been obtained by him, then no deduction on home loan shall be
\nallowed u\/s 80C. In such case, the aggregate amount of tax deduction already
\nclaimed in respect of previous years shall be deemed to be the income of
\ntaxpayer of the year in which the property has been sold & taxpayer shall
\nbe liable to pay tax on such income.<\/p>\n
\n<\/strong>Benefit
\nunder Section 24:<\/strong><\/p>\n
\ninterest on such housing loan under the head \u2018Income from House Property\u2019, where
\nthe loan has been taken for the purpose of purchase \/ construction \/ repairs \/
\nrenewal or re-construction of a residential house property.<\/p>\n
\ncase of self-occupied property<\/strong> (which is neither let out
\nnor put to any other use) by the owner, the maximum limit of deduction is Rs.
\n2,00,000 (This limit is applicable form financial year 2014-2015, earlier limit
\nwas is Rs.1,50,000).<\/p>\n
\nare the conditions for claiming the deduction up to Rs. 2,00,000?<\/strong><\/p>\n
\nLoan <\/strong>is taken on or after 1st<\/sup> April
\n1999<\/strong><\/p>\n
\nThe acquisition or construction should be completed within
\nthree years from the end of the financial year in which the loan is taken<\/p>\n
\nLoan should be taken for the purchase or construction of
\nhouse property. (Loan should be not taken for repairs or re-construction of house
\nproperty)<\/p>\n
\nof purchase \/ construction \/ repairs \/ renewal or re-construction of a
\nresidential house property then deduction is available only to the extent of Rs.
\n30,000.<\/p>\n\n
\ndeduction available if house property is not self-occupied:<\/strong><\/li>\n<\/ul>\n
\nis no limit for deduction of interest in case of property which is not self
\noccupied. In other words, the taxpayer can claim the deduction of any amount of
\ninterest without any ceiling limit if the property is let out.<\/p>\n
\nIf the taxpayer is having more than one house properties, one
\nof those properties is assumed as self-occupied as per the choice of taxpayer
\nafter taking into consideration tax saving & other properties are treated
\nas \u201cDeemed to be Let-Out\u201d. <\/p>\n\n
\nthe provisions of section 24 are applicable in case of Interest on
\nPre-Constructed Property?<\/strong><\/li>\n<\/ul>\n
\nmany cases amount for purchase of property is paid even before the construction is completed. Some people may purchase property even before the construction is
\ncompleted. In such cases:<\/p>\n
\nallowed for interest paid before completion.<\/p>\n
\nloan is taken for the Purchase\/ Construction:<\/p>\n
\ninterest payable by the taxpayer in respect of funds borrowed before the year in
\nwhich the property has been acquired or constructed will be deducted in five
\nequal installments, commencing from the year in which the house is acquired or
\nconstructed. <\/p>\n
\nthis purpose, \u201cpre-construction period\u201d means the period commencing on the date
\nof borrowing and ending on (a) 31st<\/sup> March immediately prior to the
\ndate of completion of construction or date of acquisition (b) date of repayment
\nof loan, whichever is earlier.<\/p>\n
\n<\/strong> Benefit under Section 80EE: (If loan is
\nsanctioned in the financial year 2013-2014)<\/strong><\/p>\n
\nfrom financial; year 2013-14, which provides additional tax deduction of Rs.
\n1,00,000 to the first time homebuyers in respect of interest on home loan.<\/p>\n\n
\nu\/s 80EE?<\/strong><\/li>\n<\/ul>\n
\nInstitution is a bank or a house finance company (i.e. an Indian Public Limited
\nCompany formed with the main object of carrying on business of providing long term
\nfinance for construction or purchase of residential houses in India).<\/p>\n
\nduring the financial year 2013-14<\/p>\n
\nhouse property does not exceed Rs. 25 Lakh.<\/p>\n
\n40 Lakh.<\/p>\n
\nthe date of sanction of loan.<\/p>\n
\n80EE, let\u2019s know the amount of deduction:<\/strong><\/p>\n
\nthe above conditions are satisfied, interest payable for the year 2013-14 on the
\nloan shall be deductible for the financial year 2013-14 up to maximum of Rs.
\n1,00,000. However, if the interest payable during the year 2013-14 is less than
\nRs. 1,00,000, then balance amount shall be allowed as deduction in the financial
\nyear 2014-15. <\/p>\n
\ne.g the interest payable for the year 2013-14 on loan is Rs. 75,000, it is
\ndeductible fully in the financial year 2013-14, and the balance amount of Rs.
\n25,000 will be deducible in financial year 2014-15.<\/p>\n
\nthat if deduction is claimed under section 80EE then no deduction will be
\nallowed in respect of such income under any other provision of the act for the
\nsame or any other financial year.<\/p>\n
\nthe exemption of House Rent Allowance even then he can claim tax benefit u\/s
\n80C, 80EE and 24, subject to the applicable conditions. However, it is to be noted that, Where the
\nemployee has not actually incurred expenditure on payment of rent or stays in
\nhis own accommodation, no exemption on HRA is available.<\/p>\n