Home loan tax benefits – frequently asked queries

Home loan tax benefits-frequently asked questions

Home loan tax benefits – FAQ

The maximum possible benefits would be upto INR 2,50,000 (increased from 1,50,000 lacs in 2014 budget) on the interest payment on the home loan and upto a maximum of INR 1,50,000 (increased from 1,00,000) towards deductions under section 80 C.  While the generic principle remains true, however based on various cases, the applicable benefits vary significantly and we may end up having no deductions. The following key question raised by Alex helps to put these cases together and would assist us in taking the best decisions

 

1. I have bought an flat which is under construction, can I take the benefits of home loan ?

No, the benefits on the home loan can be taken only if the construction of the flat has been completed in the current financial year and the registration has been completed. This is something most people realize only after they have bought an under construction property. However, the tax laws allows you to cummulate the interest that you have paid over the last 3 years during which the flat was under construction and allow deduction of the same over the next five years. e.g If Alex paid an interest of INR 30,000 every year over the last 3 years of construction then he would have paid a total of INR 90,000. This amount can be divided over the next 5 years and cummulated with the current year interest payment. This would mean that Alex can include INR 18,000 (INR 90,000 divided over 5 years) along with the INR 30,000 of interest payment of the current year to take a total benefit of INR 48,000.

 

2. I have a flat in Delhi which I have taken using a home loan and I have been transferred to Mumbai recently. Currently I am living on rent in Mumbai. Can I take the home loan tax benefits pertaining to my flat in Delhi ? Can I also claim my HRA (house rent allowance) for the rent I pay in Mumbai ?

The answer is yes to both. With regard to home loan on your flat in Delhi, you can take the home loan tax benefits (only for one flat). This would be upto the maximum permissible INR 1,50,000 lacs per year on the interest payment. If you have rented out the flat to someone else, then you would need to include the income from rent as part of your total income. If you have rented out the flat and showing it as an income, then there is no limit to the tax benefits on the interest portion paid.

Apart from this since you are living in Mumbai and paying rent, you can also claim the HRA  (house rent allowance) benefits on the rent maximizing your tax savings.

 

3. I have a flat in Mumbai, but I am not living in the flat instead have taken a rented property closer to my office in Mumbai, can I take the tax benefits on the home loan ? How will it impact the HRA benefits ?

With regard to tax calculation, the provision on HRA (house rent allowance) and those with regard to benefits on home loan is not linked to each other. This means that you may own a flat in Mumbai but you can live in another Flat for business reasons. Hence, with regard to home loan on your flat in Mumbai, you can take the home loan tax benefits (only for one flat). This would be upto the maximum permissible INR 1,50,000 lacs per year on the interest payment.

 

4. The interest that I pay on home loan is more than INR 2,50,000. Can I claim the entire amount?

No, the maximum permissible tax benefit that can be taken is INR 1,50,000.

 

5. The interest that I pay on home loan is more than INR 1,50,000. How can I maximize the tax benefits on the home loan?

You can maximize the benefits if the property is co-owned with your spouse or family member in which case both of you would be able to take the benefit of INR 1,50,000 limit. You would need to show that the property is co-owned and that both you and your co-applicant is paying towards the EMI in the ratio in which you would like to claim the benefits or you can make the payment to EMI through a joint account.

 

6. Can I claim the home loan tax benefits in case I have 2 properties ?

Yes deduction is permitted on both properties. In case you have two home loans for two separate house properties and if you are residing in one of the houses, then first House is considered self occupied. Hence you can take the home loan tax benefits on the first house. With regard to the home loan tax benefits on the second home, it will be considered as ‘deemed to be let out’ and the deemed rental value (if not rented out) or the actual rental value (if rented out) will be considered as income and taxable in the hands of the individual.

 

7. My HRA (house rent allowance) is currently INR 2,40,000 per annum (allowance of INR 20,000 per month). My friends and family tells me to buy a flat so that I can take tax benefits?

This is a very important question and a situation most people come across and would require a careful deliberation on the same. Under income tax norms, the provision on HRA and home loan tax benefits are not linked

Let us assume that Alex takes a home loan to buy a flat where the annual interest payment as part of EMI is INR 3,00,000 (a home loan of INR 35,00,000 and above would have annual interest payment of INR 3,00,000 or more).

  1.  If Alex has purchased the flat in his name and is staying in the flat he purchased, then he cannot claim HRA (house rent allowance) and the maximum he can claim is INR 1,50,000. Hence instead of taking benefits on INR 2,40,000 as part of HRA, he is losing tax benefits of INR 90,000 and he can claim tax benefits of only INR 1,50,000. Hence from buying a house with the intention of taking tax benefits is not the right decision.
  2. If Alex had purchased the flat in his spouse name, then he could gain the benefits of HRA but would need show the rent as income in his spouse name. This would mean that the spouse would have to show the rent received as income and need to pay taxes as per the norms. Alex’s spouse would be able to take deductions as per the tax norms slabs. Assume Alex’s spouse in not working, and let us assume the rent that Alex pays   to his spouse if INR 20,000 per month. Hence the    spouse annual income is INR 2,40,000 which is within the minimum tax benchmark and hence wouldn’t need to pay tax. In this case there is no real tax benefit that Alex is gaining (albiet he tried to take buy the house in his spouse name) except that he is able to take the benefit of a HRA. If Alex spouse is working, then her total income including the rent can take the benefit of the 1,50,000 tax benefit on the interest paid.    However, given that his spouse    income is showing an additional income due to rent of INR 2,40,000, her net taxable income including the rent after deducting that tax benefits is higher and hence his spouse need to pay a higher tax.
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  • Sumanta

    I am having 2 houses one in Kolkata and one in Ghaziabad, I am staying in Ghaziabad property and my parents are staying in Kolkata property.

    In this scenario can I get tax benefit from both the property?

    • Jis

      Dear Sumanta,

      Yes you can claim tax benefit from both the property but subject to the overall limits of

      1. INR 1,50,000 on the interest paid on the home loan.
      2. INR 1,00,000 under 80 c on the principal repaid.

      As you would know, you cannot claim HRA benefits once you have claimed tax benefit on your Ghaziabad property. You may also read the following article of the benefits available in home loan http://www.goodhomeadvisor.com/blogs/home-loan-tax-benefits-simplified-know-it-before-you-buy-a-home-for-saving-tax-2/

      regards and very best,
      Good Home Advisor

      • Rajesh

        Hi Jis,
        If I am not staying in both the houses, Can I avail tax benefits on both home loans?(in above case, kolkata & Ghaziabad)

        If I given both homes for rent and staying in rented home, then ?
        1) Can I avail HRA from my company?
        2) I think I can claim tax exemption upto 1.5L interest paid on 1st home loan & 1L principle under 80C. Please clarify.
        3) I think I can avail tax exemption on interest paid on 2nd home loan with out limit. Please clarify.

        I can show rents on both houses as my income and can I get HRA benifit too as I am staying in rented home?

        Thanks,
        Rajesh

  • A Saha

    Hi,

    One home loan was sanctioned for me for a underconstruction flat. EMI was started from last october, 2012. The loan was fully disbursed on Jan, 2013 during final registration of the flat. i have not yet received possession letter of that said flat.

    May i avail tax benefit for loan interest paid from Oct-2012 to Mar-2013 ?

    Thanks
    A Saha

    • Hi,

      As per the tax rules, you can claim the benefit only upon receiving possession. Hence would suggest you stick to the regulations to be on the safe side.

      Thanks
      Good Home Advisor

    • Jis

      Hi,

      As per the tax rules, you can claim the benefit only upon receiving possession. Hence would suggest you to stick to the laws to be on the safe side.

      Thanks

  • Amit

    I have taken home loan in Fy12-13 for under construction property. Loan is partially disbursed and will be fully disbursed in FY13-14.I will also get possession of property in FY13-14. Can I claim Interest Tax deduction of 250000 under sec24 as per latest Budget 2013.
    If no, is there any way out to claim deduction
    i job location and my new flat city is different and I am going to rent my new flat

    • Jis

      As per the existing rules the deduction of housing loan interest paid is INR 150,000 under section 24. The additional benefit of INR 1,00,000 under section 80 EE is only subject to you having taken the housing loan from April 2013 till March 2014. Given that your home loan is disbursed in FY 12-13, you won’t be able to claim the additional 1,00,000 lac deduction.

      With regard to your second query on your flat being in a different city, you can claim the benefits on home loan interest. However, the rent on flat will be considered towards your total income.

      hope this clarifies your query

      Thanks
      Goodhomeadvisor.com

      • Amit

        Thnks for reply
        In case my flat being in a different city, How much I can claim the benefits on home loan interest.
        a) upto 1.5 lac as per sec 80EE or
        b) unlimited if i show the rental income as income and entire interest as loss on property.

        2nd query
        What is the registry amount including stamp duty i have to pay
        location of flat: saguna more, danapur,patna
        area of flat :950sqft
        property value: 23.75lac + 2.72 lac for amenties = 26.47 lacs agreement amount

        • Jis

          Hi Amit,

          The claim on the benefits with regard to home loan interest is only upto INR 1.5 lacs. In case your interest on the home loan paid is higher, you cannot claim beyond the limit.

          With regard to your query on registry amount and stamp duty, the approximate amount will be ~8%. However I would recommend that you consult a local chartered accountant and show your housing contract to arrive at the exact amount.

          Thanks
          Jis
          Goodhomeadvisor
          http://www.goodhomeadvisor.com

  • Hi
    I am native of Kerala. If I avail Home Loan to acquire a new Home at Tamilnadu will I get tax benefits?

    • Jis

      Hi Jaganadh,

      You can avail home loan tax benefits for the house acquired in Tamil Nadu even if your work location is kerala. However there are few things to keep in mind

      1. If this property is let out then you will have to include the rent as income and the home loan tax benefits need to be computed on the revised income
      2. If it is not let out and this is your only house then there would not be any addition to your income
      3. If it is not let out but this is your second or additional house, there would be Notional Value assumed as rent and your income will consider the Notional Value rent and your home loan tax benefits needs to be computed on this revised income.

      hope this helps

      thanks
      team – Good home advisor
      http://www.goodhomeadvisor.com

  • Arul Kumar Rajaraman

    Hi JIS

    Good Evening.

    I have bought land and constructed house within a year.

    Land loan Rs:1,00,0000

    House Construction Loan Rs: 22,40,000

    But my Investment Declaration 80 C – Already Crossed 1,00,000. Here , I can Show only 24-b Section only I can show 1,50,000. Is there any other way Shall I show my Tax in Tax Slab. Even If I show 1,00,000 in 80 C. there is no benefit ?.

    Please reply (Explain) full details. But I will be owned next month to newly Constructed house.

    Could you please explain.

    Thanks
    Arul Kumar Rajaraman

    • Jis

      Dear Arul,

      I am afraid you do not have much options with regard to taking benefits of the home loan. Infact once you move into your home, the HRA benefits cannot be claimed.

      As you have pointed out, you can only claim the INR 1,50,000 under Section 24-b.

      thanks

      Goodhomeadvisor.com

  • Anu

    Hi,

    I own a house on home loan and rented out as I am out of country. Whats the total available tax benefit to me?

    • Jis

      Dear Anu,

      With regard to the tax benefits available on the home loan and rent, below are the key points

      1. The income from rent will be taxed under the normal income tax slabs as per the current income tax rules. Upto 2,00,000 there is no tax and beyond which there are standard tax slabs which are same as a resident indian.

      2. You can claim 30% of the net annual value (market value of rent) as repairs and maintenance expense and reduce from your total income. I am assuming your income in India is only the rent.

      3. The normal decductions of interest on home loan upto a maximum of INR 1.5 lacs per year is also deductible.

      Hope this helps,

      Jis,
      Good home adivsor

  • Hi,

    Our home loan was sanctioned for me for a underconstruction flat. EMI was started from June , 2011. The loan was fully disbursed in Aug, 2013 during final registration of the flat. We expect to get the final posession by March 2014.

    The loan amount is 50 Lakhs and our monthly emi is around 48000.

    Meanwhile we are staying in a rented house for a monthly rent of Rs 20000.

    Assuming that we get the possession by the end of this financial year,

    1) Can we claim HRA as well as interest benefits on the home loan?
    2) May i avail tax benefit for loan interest paid from June 2011 to Mar-2014 ? Is this over and above the limit of interest component of 150000?
    3) The loan is in the name of me and my husband. Can we both claim 150000 + previous years interest?

    Thanks
    Remya

    • Jis

      Hi,

      As per the tax laws, you have touched upon a grey area wherein you have received your registration of the property but not the possession. Hence the views are can also be contested as different chartered accountants take different views in this scenario with regard to availing home loan interest benefits.

      1) Can we claim HRA as well as interest benefits on the home loan?

      On a more aggressive view on the income tax laws, you can claim HRA as well as interest benefits on the home loan as you can show that your home is not ready for living yet. However, if you want to be conservative you may defer taking interest benefits till possession

      2) May i avail tax benefit for loan interest paid from June 2011 to Mar-2014 ? Is this over and above the limit of interest component of 150000?

      Keeping the above view in mind the interest that you have paid till August -13 (if you choose to defer interest benefits till possession then interest paid till March-14) will be capitalized and you can claim 1/5 of the amount over the next 5 years. However this amount will be within the limit of interest component of 150,000.

      3) The loan is in the name of me and my husband. Can we both claim 150000 + previous years interest?

      Yes both of you can claim the benefits of 150000 + previous years in proportion

      regards,
      Jis

  • Sudhakar

    Hi Jis
    If both the houses are on rent, can one property be declared as deemed to be self occupied and its income be exempted from taxable income ?

  • Arul Kumar Rajaraman

    Hi Jis,

    I sincere thanks to your answer.
    Please remove my question and answer(yr answer -both).

    please do the needful.

    Thanks & Regards
    Arul Kumar Rajaraman

    • Jis

      Hi Arul,

      Our apologies, we cant delete comments once it has gone through the approval process. Also I am sure your question is a valid a common one and hence people would be able to benefit from same.

      thanks
      GoodhomeAdvisor

  • Hems

    Hi JIS

    How are you ? I have taken home recently , i will get possession in March 2014.

    Now the question is

    Should i start to pay premium from today or i should pay after getting possession ?

    Also i want to pay some amount to my loan should i do that ?

    Please tell me…..

    • Jis

      Hi,

      Can you provide more light on the query. Did you mean premium as in interest rates ? What is the amount of the loan and how much is the interest rate ?

      Thanks,

      Jis

  • Prakash

    I had taken a loan for my first house property in 2003. The loan was pre closed in 2011. I took an income tax exemptions from 2004 to 2012 for that house. Currently i am residing in that house. Recently I purchased a second house (ready to occupy flat) and took a loan for the same. I am planning to gift the flat to my daughter. Can i take an income tax exemption for the flat bought recently? is there any rule that i am not allowed to look for an exemption second time? do i need to reside in the second property to look for IT exemption? please clarity…

    • Jis

      Hi Prakash,

      Yes you can avail the benefits on the home loan. However the house that is unoccupied you would need to ascribe rental income equivalent to the municipal rates.

      Hope this helps to address your query.

      thanks,
      Team Goodhomeadvisor

  • Manpreet Singh

    Hi,

    I have taken a loan for under construction apartment.There is a delay in possession. So total time of under construction is about 5 years.I am paying Annual Interest of about 1.5 lacs, so for 5 years of under-construction it becomes, 7.5 lacs.If i want to claim it in 1/5th part, it becomes 1.5 lacs but I also have paid interest for current year of about 1.5 lac, Can I get benefit for 3 lacs? (1.5 lac for this year and 1.5 lac of underconstruction period)

    • Jis

      Hi Manpreet,

      The maximum benefit that you can claim is limited to INR 1.5 lacs per year. Hence you cannot aggregate the benefit to INR 3.0 lacs.

      In the event if the property is jointly owned with your spouse then you can claim INR 1.5 lacs each.

      Hope this helps to address your query

      Thanks

      Team Goodhomeadvisor

      • Manpreet Singh

        Hi,

        Thanks for your response.

        As you said if the property is jointly owned with my spouse it is possible, Is it possible to claim 1.5 lacs each, if the property is jointly owned with Father or Mother?

        Thanks in Adv.

  • SRINIVAS

    hi,
    My new house is in my mother name, housing loan is on mother name, but as mother dont have income to repay, bank has taken my gurantee and i am paying the EMI now.
    can i avail tax excemption in this case? Property is on mother name.

    please reply

    • Jis

      Hi Srinivas,

      You wouldn’t be able to avail the tax benefit as the house is registered under your mothers name.

      thanks,
      Team goodhomeadvisor

  • Alok

    Hi There,
    I booked one flat in 2010 and availed loan for the same in 2011. This flat is under construction and possession is not given.

    Now in addition I have purchased 2nd ready to move in flat in May-2013 as self-occupied which meets all conditions except first flat condition if we assume under construction flat as 1st flat. Is there any option to avail 80EE benefit for 2nd flat home loan.

    Thanks. Alok

    • Jis

      No you cannot avail the benefits of 80 EE as you have already bought a home even if it is under construction.

      The 80 EE is targeted at first time home buyers and targeted at affordable housing there are few restrictions.

      1. The loan is sanctioned between the FY 1/4/2013-31/3/2014.
      2. The loan sanctioned does not exceed Rs. 25 Lakh.
      3. The value of residential house does not exceed Rs. 40 Lakhs.
      4. The assessee does not own any other residential house as on the date of sanction of the loan. In other words, this house is supposed to be his self occupied property.

      5.The assessee is a first time home buyer

      regards,

      Goodhomeadvisor

  • Ragavendran

    I had booked the plot with my builder and got the home loan sanctioned for 15 Lakh. Now I have the plan to purchase one more plot with house which I am planning to go for home loan again for 20 Lakhs. I have the eligibility till 40 lakh, my question here are

    Will I get one more loan ?
    Is there any criteria like after getting first loan do we need to wait for sometime to avail second loan?

    • Jis

      Hi Ragav,

      You can definitely look at availing the additional loan and there is no criteria which states that you need to wait for some period prior to applying for the loan.

      However the banks are extremely cautious these days and are tightening the eligibility criteria compared to earlier days. Hence you may face some challenge with few banks for the home loan.

      regards,
      Team Goodhomeadvisor

  • Hi,

    i have purchased a flat in kolkata with home loan however transfered to Hyderabad. I have not rented my flat of kolkata, however paying rent in Hyderabad. Can i claim tax benifit?

    • Jis

      Hi Prem,

      Yes you can claim the tax benefit.

      THanks,
      Team Goodhomeadvisor

  • vivek

    Hi,

    i have bought a flat last year and now builder told me i will get passion later in next 10-15 days. currently i am living on rent and paying 12K rent. if i will get passion later in next 10 days means in February 2014.

    can i claim HRA and home loan interest both for this year.
    How much i can claim for home loan

    Thanks,
    Vivek

    • Jis

      Hi Vivek,

      You can claim for both HRA and home loan interest. The limit on home loan interest is INR 1.5 lacs per year.

      However, given that you would be given possession of the house which I assume is in the same city, there has to be strong reason why you haven’t moved into the house.

      The alternative is that you can show a rental income as part of your income which will be taxable and the rental income should not less than the circle rate for rent.

      Hope this helps,

      Team Good Home advisor

      • vivek

        Hi Jis,

        Thanks for quick reply.

        Today we got the passion later from builder. my flat is in greater Noida and currently i am residing in dwarka delhi . so can i claim HRA of my rented house from Apr 2013 to Jan-2014 and home loan interest.

      • saroj

        hi,
        I have purchased under construction flat and paying the EMI.
        whether i get tax benefit on home loan for principal amount which i am giving .

        • Jis

          Hi SAroj,

          You cannot claim benefit on the under construction flat. You can claim benefits only after registration and possession.

          thanks

          GHA team

  • Rinku Kushwah

    Hi,
    i have housing loan and i am paying same but the house is purchased by my mother’s name, so can i get tax benefits on housing loan.

    • Jis

      No, If the home is in your mother’s name, you cannot claim tax benefit in your name.

      regards,
      Team Goodhome advisor

  • HarshD

    I would like to know whether we can claim deduction of Interest on Home Loan taken from Individual u/s 24b or any other section. Amount is Rs 36,000 annually.

  • Siddhartha Pandey

    Hi Jis,

    My house is in my wife’s name. She is not working and I am paying the EMI. How can I claim tax benefits in this regard. Please help.

    Regards,
    Siddhartha

    • Jis

      Hi Siddhartha,

      You cannot claim income tax deduction if the house is in your wife’s name. However there are ways which will enable your wife to gift part of the right / interest on property to your through a deed which can be registered. You can take tax benefit subsequent to that.

      I would suggest you should consult a chartered accountant for this.

      regards,
      Jis

      Team Goodhomeadvisor

  • Ashvini

    Hi Jis,

    I was availing home loan (alreay sanctioned) as per instalment since 2009 for underconstruction flat for construction link payments. In feb 2014 I got the possession of the flat. So construction of flat has taken around five years.

    Following is financial year (FY) wise Interest payment on home loan.

    2009-10 Rs 13000/-
    2010-11 Rs 33000/-
    2011-12 Rs 75000/-
    2012-13 Rs 140000/-
    2013-14 Rs 250000/-

    Now in FY 20113-14 I want to avail tax benefit for Interest paid for home loan. What interest amount I can deduct in FY 2013-14 if I let out this property for month of march 2014? Please note that this is my first property but I stay in different city because employment reasion. What will be amount if property is not let out?

    Regards,
    Ashvini

  • Ashvini

    Hi Jis,

    I was availing home loan (already sanctioned) as per instalment since 2009 for under construction flat for construction link payments. In feb 2014 I got the possession of the flat. So construction of flat has taken around five years.

    Following is financial year (FY) wise Interest payment on home loan.

    2009-10 Rs 13000/-
    2010-11 Rs 33000/-
    2011-12 Rs 75000/-
    2012-13 Rs 140000/-
    2013-14 Rs 250000/-

    Now in FY 20113-14 I want to avail tax benefit for Interest paid for home loan. What interest amount I can deduct in FY

    2013-14 if I let out this property for month of march 2014? Please note that this is my first property but I stay in

    different city because employment reason. What will be amount if property is not let out?

    Regards,
    Ashvini

  • Ashvini

    I was availing home loan (alreay sanctioned) as per instalment since 2009 for underconstruction flat for construction link payments. In feb 2014 I got the possession of the flat. So construction of flat has taken around five years.

    Following is financial year (FY) wise Interest payment on home loan.

    2009-10 Rs 13000/-
    2010-11 Rs 33000/-
    2011-12 Rs 75000/-
    2012-13 Rs 140000/-
    2013-14 Rs 250000/-

    Now in FY 20113-14 I want to avail tax benefit for Interest paid for home loan. What interest amount I can deduct in FY 2013-14 if I let out this property for month of march 2014? Please note that this is my first property but I stay in different city because employment reasion. What will be amount if property is not let out?

    Regards,
    Ashvini

    • Jis

      The maximum benefit you can avail on interest payment is 1,50,000. If you have let out the flat, then the rent income need to be added to your other income to calculate the tax component

  • s. choudhary

    I hv purchased ready possesion flat & living in the same flat from last 3 yrs. but builder not given the possesion letter still, i have submitted My Home loan statement to our payment egency for tax benifit now they asked me possesion letter to get interest benifit. so pls. guide what i hv to do.

    • Jis

      You would need to get a possession letter from the builder. Else you could try to get a letter from the RWA which has the right on the land suggesting the flat is occupied by you.

  • janakee

    hi
    sir
    i have booked an apartment in consruction iinked plan and took home loan for it. presently i am staying in a rented house near to my office . sir can i claim hra benifit and sec 24(b) and 80c. please reply.

    • Jis

      Hi Janakee,

      If you haven’t got the possession and the registration of the flat, you cannot claim the benefits under income tax.

      Please feel free to ask any queries you may have.

      Thanks & Regards,

      Jis
      Please visit and like out facebook page
      https://www.facebook.com/GoodHomeAdvisor

  • janakee

    HIhi
    sir
    i have booked an apartment under construction linked plan and took home loan for it in march 2013 in noida extention. presently i am staying in a rented house in delhi near to my office . sir can i claim HRA benifits and sec 24(b) and 80c benifits. please reply.

  • Prakash

    I have booked a Flat for Rs. 62 Lakh by paying an advance of approx. Rs. 12.5 Lakh in Feb. 2014. After a week I applied for a home loan of Rs. 50 Lakh and has been sanctioned on 12th march, 2014. The bank will pay about Rs. 18 Lakh in the near future to the Builder which is likely in March,2014.
    Also in the month of April/May,2014 , I will be selling one of my old Flat say for Rs. 35 Lakh. I would like to invest this money in adjustment of loans and paying to the Builder so that the loan burden is reduced significantly.
    Now my question is can I do this? Will there be any long term capital gain problem from income tax angle? Please advise.

    • Jis

      Hi Prakash,

      There are 2 parts to your question. As regards with regard to reducing your home loan burden, while the bank has sanctioned a loan of 50 lacs of which you will be drawing down only 18 lacs, there is no requirement to draw down the balance and you can use the money from sale of the flat to pay the builder. In case you want to reduce the loan from the bank further i.e below 18 lacs, you would need to see the key terms of the home loan whether prepayment of the home loan is permitted.

      With regard to long term capital gain the answer is incase you re-invest your entire profits, then there wouldn’t be long term capital gains

      regards,

      Jis
      Team Goodhomeadvisor

  • Mr Anderson

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  • Jitendra

    Hello,

    First of all thanks to you & your team for helping all of us with your answers.
    Please answer my query as well.

    Query:
    ———-
    I have purchased a home in 2009. I am planning to repay the remaining loan entirely soon. After that I am planning to buy a second home.
    1. I want to know the tax rebate that me & my wife will get on new / second home loan which we are planning to take?
    2. Will my entire interest will get the tax deduction (lets say Interest Amount is 6 Lacs PA) assuming my total taxable income is more than 7 lacs.
    3. It would be great if you can explain with a sample illustration.

    Thanks,
    Jitendra

    • Jis

      Hi Jiten,

      Please see the response to your queries below

      1. I want to know the tax rebate that me & my wife will get on new / second home loan which we are planning to take?

      Incase the house is located in a different location, then you can get the benefit of the home loan. Else you would have to impute a rent which is the circle rent for the area as your income and then take the benefit of the home loan.

      2. Will my entire interest will get the tax deduction (lets say Interest Amount is 6 Lacs PA) assuming my total taxable income is more than 7 lacs.

      The maximum deduction permitted on the interest is INR 1.5 lacs per year per person (i.e you and spouse can claim benefits upto INR 1.5 lacs each). In case the interest that you pay is higher then you cannot avail the benefit of the excess amount.

      3. It would be great if you can explain with a sample illustration.

      Hope the above has been helpful.

      Regards,
      Jis
      Team Goodhomeadvisor

  • basant

    Hi Jis,

    I am working for a company in Gurgaon (Haryana). I am staying in a rented house in haryana which is near to my office. I have two flats(in Ghaziabad & Delhi) for which I have taken home loan.If I am not staying in both the houses and given the ghaziabad property on rent and delhi property is lying vacant and is expected to have tenant in future.,

    1) Can I avail tax benefits on both home loans.I would be more interested in the “interest ” part of both (delhi & Ghaziabad) the loan. (As 1 lac limit for 80C is already consumned by my LIC)
    2) Can I avail HRA for the Gurgaon house for which I am paying Rs 18,000 per month rent

    I can show rents on both houses as my income and can I get HRA benifit too as I am staying in rented home?

    Thanks,
    Basant

  • Ashna

    Hi Jis,

    I have self-occupied home in my current city and I have been availing tax benefit (both on interest and principal, but mainly on interest payments). My home loan is almost paid-off – remaining principal is less than one lakh rupees now which I am planning to close with in couple of months.

    My wife has purchased an apartment in different city. She is a home-maker and hence I am the co-borrower on the loan. She is going to get the possession of the apartment during May/June of this year.

    Following are some of my questions:
    1. Can I avail the tax benefit (both Principal and interest) though I am not the owner but I am the co-borrower of the loan? In fact, I am more interested on availing the tax benefit on interest part as I have other instruments to cover 80C tax benefit (which is applicable to principal amount).

    2. As my wife is the owner and she gets the rent (after she gets the possession and rents it out), is it required to pay tax on the rent received? She is home maker and her income will be only form this rent which would not even cross the minimum 2 lakhs income bracket for female citizens.

    3. Is there any wealth tax to be paid?

    Could you please provide your valuable suggestions?

    with regards,
    Ashna

  • Amol Joshi

    I have taken 2 properties. 2st property loan has been completed in 2012. I have received possesion for 2nd property in march 2014. Can I claim Intereset from 2nd property for full year? Also should I show rent for 1st property only after april 2014? or for full year ?

    • Jis

      Yes you can avail the benefit of the 2nd home loan but you can claim it only for 1 month. The 1st property would be deemed as self occupied and hence you need not show any rent neither can you avail HRA benefits. On the second property, you need to show it as rented from March 2014

  • Hello

    I am currently working in Mumbai and plan to buy a 2 BHK. But my current need is only for a 1 BHK. I plan to buy the 2 BHK flat with a home loan and then rent it out. I will be then living in a nearby area in a 1 BHK (with lower rent). Both places are close to my office.

    In this scenario,
    1) Shall I be able to deduct whole interest on the loan (under Section 24) or subject to an upper limit?

    2) The rental income would be taxable in my hands. What deduction would be allowed from that for tax computation? For example, if the rent is Rs 30,000 pm, maintenance charges are Rs 10,000 pm, will the tax impact be: 30% of 12 * (30k – 10k)?

    It will be great help if some clarity could be there regarding it.

    Thanks much in advance!
    Neha

    • Jis

      Hi,

      The response to your queries are as follows

      1. You can deduct a maximum of 1.5 lacs per year from your salary as part of deduction under section 24.

      2. Given that you house is in the same location as you will be staying and also nearby to office. Your claim as HRA would be disallowed. This would mean that you may not get the benefit of HRA of the rent that you are paying for your 1 BHK.

      3. In addition the rent that you receive from 2 BHK would be taxable.

      Hope this helps you to take a decision.

      regards,

      Jis,
      Team goodhomeadvisor
      3. In addition the rent that you receive from your 2 B

  • Sudhir

    Hello JiS,

    I owned two flats in previous financial year. I took tax benefit on interest portion of second home in previous financial year.

    Now I have sold first flat on 7th April2014, used this amount for partial payment of second house. Still there is some home loan on second home. Can you please tell me what will be my tax liability?

    Since I sold my first house in this financial year, am I supposed to claim tax benefit on interest portion of second home this year too? Or This year I can claim tax benefit on second home as if I have only one home (priciple+ ineterest)?

  • smitha

    Dear Sir,

    I am a salaried person. My basic is 7080 and hra is 4230. I am paying a rent of10000/month and i am having a home loan,that is 11352 /month emi.and my own house is given for rent for 10,000/month.and my tenant is showing my pan card number also.my query is do i have to mention it my tax proposal, that i am receiving the rent.if so ,how my tax will be calculated based on this.
    kindly help

    • Jis

      Hi Smitha,

      You would need to consider the rental income as part of your income for calculating the tax liability.

      thanks
      team goodhomeadvisor

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  • Lovneesh

    Hi,
    I have purchased a flat in 2010 and possession is given by buider to me in mar 2014. can i avail the tax benefit for entire year or only 1 month? bank EMI is paid from 2011 onwards.

    Pls guide

  • Sardar singh

    i have sell my property in 24 lacs & clear my home loan about 6 lac & i have new property in 7 lacs & start construction ,construction estimate near about 12 lacs , than iam liable foe any tax , i have no profit eran from selling property

  • Sunil Kumar

    I have purchased a flat with my mother (Housewife with no income) as co-owner and co-borrower. The cost of house is Rs. 77,00,000 and I have taken a loan of Rs 48,00,000 for which I am paying entire EMI from my salary. I have a separate room with toilet in the flat which has been rented out for Rs 5,000 per month. My query is

    1. How much deduction of Interest can I claim from my income? Is it Rs. 1,50,000 or more? If more then how much?

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    • Jis

      Dear Reader,

      Thank you for your comment. However we are not able to publish your comment as it has an advertisement link. We would be happy to promote you provided you can contribute to our community through insightful article and pictures.

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  • Pratyush

    Hi,
    I own a house property and I also have a loan against it which I am paying.
    My questions is, if I transfer the loan to my wife’s name and still keep paying the installments from my account, will I be eligible to claim the income tax benefits like I am doing currently (I continue to be the owner of the property with 100% ownership).

  • Pratyush

    I own a house property and I also have a loan against it which I am paying.
    My questions is, if I transfer the loan to my wife’s name and still keep paying the installments from my account, will I be eligible to claim the income tax benefits like I am doing currently (I continue to be the owner of the property with 100% ownership).

    • Jis

      Hi Pratyush,

      Your question is a bit misleading. If you have a loan against a property, you cannot transfer the property to your spouse name. It would require that the loan also be transferred.

      Additionally, you could make this a joint loan, however, the property also need to be held jointly in which case, if you make the payment, then you can avail the loan benefits.

      Thanks,

      Team Goodhomeadvisor

  • mano

    Dear Sir,

    I have a house in my name given to me by my dad through a gift deed, now i have booked a 2bhk flat jointly in my mothers name and my self which will be ready for possession in 2016 june, Can i claim IT benefits on the home loan taken for the interest, i am planing to rent my old house and move to the flat. Kindly advice.

    Regards,
    Mano

    • Jis

      Dear Mano,

      Yes you can claim tax benefits on the home loan, however, you can claim the benefits only after possession. Secondly, you will have to pay tax on the rental income of your old house that you will be renting out.

      regards,

      Jis and GHA team

  • sandeep

    Hi
    Have a few queries as listed below. Plz assist.
    1) I am getting possession of my flat in Bangalore but the registration will happen only after few months. Can I claim for tax benefit?
    2) Can I claim for tax benefit on two properties while stay on rent in a different city?
    3) Taking into consideration the above can I get HRA benefit as I am staying in a different city from where both the flats are located?

    • Jis

      Hi Sandeep,

      The response to your questions are below
      1) The tax benefit can be claimed only after registration

      2) You can claim tax benefit only on 1 home loan. Hence only on one property

      3) Yes you can claim HRA benefits if you are staying in a separate city. However, the property on which you are claiming home loan benefit, you would need to declare rental income – actual or based on the circle rate.

      Thanks,
      Jis and Team GHA

  • Vikas

    I am staying in Hyderabad and took second home loan in same city. I have cleared my first home loan. how can claim the second home loan interest and principal benefits? Both the houses are on same city.

    • Jis

      Hi Vikas,

      You can cannot claim benefits if you have already claimed benefits on your first home loan.

      thanks,

      Jis and team GHA

  • Soniya

    Hi,
    I got a property for which possession is due in Feb 2014, so I didn’t availed any tax benefits on interest part. and now I want to sell this property to some one else, Could you please let me know if I can still eligible to avail the tax benefits on interest part in that circumstances as well?

    • Jis

      Hi Soniya,

      I am assuming you meant Feb 2015 instead of 2014. You are eligible to claim interest only after a property against which home loan is taken is registered in your name. Since you intend to sell prior to registration, you cannot claim the benefits.

      thanks,

      Jis and team GHA

      • Akash

        I have got the possession on my name and the keys of the flat but registration is not yet done. Can I still claim tax rebate of the interest?

  • Sandeep Joshi

    I have started home loan in 2012 and now I got possession in Oct-14.
    I am owning the flat and NOT giving on rent in anyways.
    I stay on rental already and have registered rent-agreement etc. I have HRA for 2014-15 approved on provisional basis i.e. current rent * 12 month for this Fin. year.

    I want to know which one of following applies now –
    1. cancel whole HRA for ALL of this fin. year and
    Interest for this year + Principal as tax deductions
    + + 1/5 * (total interest paid in 12-13 + 13-14 )

    2. HRA till Apr – Sep 2014. as tax deductions.
    + ( NO HRA for Oct 14 – Mar 2015 ) but
    + Interest paid on home loan from Oct 14-Mar 15 + + Principal paid for Oct14-Mar15
    + 1/5 * (total interest paid in 12-13 + 13-14 + Interest paid from Apr 14 – Sep 14 !!! )

    which of above option I can choose? rather is the option 2. possible?

    • Jis

      Dear Sandeep,

      Option 2 is very much possible. I am assuming the registration of your flat is complete ? The benefits of home loan can be taken only after registration and not on possession.

      You should consider a 3rd option as well. Incase your flat is slightly away from your current locality and your HRA is higher than the circle rent of your own flat, you can declare rental income on the flat and show that you are staying on rent. However, this is suggested in case your own flat is slightly away from your current office.

      regards,

      GHA team

  • vicky

    Hi Manish,
    I have a confusion regarding section 24 related to home loan interest exemption norm of 3 years from the end of financial year when loan was borrowed. I booked a flat in an under construction property in April 2012 and registration was done in June 2012 after taking a home loan from LIC. Please note that I have booked this property in the same city where I live.

    (i) Can you please confirm by when must I acquire possession to be able to get interest exemption limit of 2 lacs (as revised from this year) ?
    (ii) If possession is not acquired by the date (viz answer to my first question), is it true that I can still get 2 lacs exemption limit if I let out the property on rent instead of self occupying?

    As it is still under contruction, I am anyways not able to claim any tax benefit, hence looking for a confirmed date to atleast get tax benefit afterwards, please clarify my confusion.

    • vicky

      any update please?

  • Sanjay Rawat

    Hi,

    I have taken a Home Loan for a Re-sale flat in June 2012.
    This Flat construction was started in Aug 2011.

    Flat is still under construction and would get possession by Feb’15 (FY 14-15).

    I have 2 Queries here –
    1. Can I get benefit on Income Tax rebate for Interest & principle part as some of the guidelines says that, Income Tax benefit can be availed fully with 3 years of construction completion from the End of Financial year in which Home Loan was taken.
    2. If Yes, Can I get benefit of Full limit of (2.0 Lac on Interest & 1.0 lac on Principle Part) as I am getting Possession towards end of Financial Year.

    Kindly Suggest

    Thanks
    Sanjay

  • tejaraj deheri

    I am having a property in the name of my wife for which we borrowed loan jointly from HDFC . however I am paying EMI towards loan as my wife is not working . can I get tax benefit against the home loan .

    • Jis

      You can claim the benefits only if the property is in your name. You can plan to change the holding from your wife to a joint property. Post which you can claim benefits in proportion

  • Sanju

    Hi,
    I have a small quiery. Had purchased a house in march 2014. My EMI start from Aprill 2014. Registration date was 28/03/2014. Didnt mentioined the registration charges and stamp duty in 2013-2014 financial year.

    Can I claim the same for 2014-2015, under 80C (Stamp duty, registration charges)

    Regards

    • Jis

      You can claim the benefits from 2014-15 as your registration is not done yet

  • vicky

    Reposting my question

    Hi,
    I have a confusion regarding section 24 related to home loan interest exemption norm of 3 years from the end of financial year when loan was borrowed. I booked a flat in an under construction property in April 2012 and registration was done in June 2012 after taking a home loan from LIC. Please note that I have booked this property in the same city where I live.

    (i) Can you please confirm by when must I acquire possession to be able to get interest exemption limit of 2 lacs (as revised from this year) ?
    (ii) If possession is not acquired by the date (viz answer to my first question), is it true that I can still get 2 lacs exemption limit if I let out the property on rent instead of self occupying?

    As it is still under contruction, I am anyways not able to claim any tax benefit, hence looking for a confirmed date to atleast get tax benefit afterwards, please clarify my confusion.

    • Jis

      Hi Vicky,

      We are not able to understand the first part of your query. As regards your question

      i) You can claim benefit on the exemption from the date of receiving possession.

      ii) We are not able to understand the query i.e how would you let out the property on rent if you haven’t received possession. After you have received possession, you can claim exemption on the interest whether you use it for self or rent it out. If you let out the property, you would be taxed on the rental income.

      We would recommend that you push your builder for receiving the possession letter, the sooner you receive the same, the earlier you can claim benefits from. However, for the period you have paid interest till possession, you can capitalize the same and claim benefits over a period of 5 years.

      Thanks,

      GHA team

      • vicky

        My query was related to section 24 home loan interest exemption norm which states property possession must be acquired within 3 years from the end of financial year when loan was borrowed to claim 2 Lacs interest exemption else it is limited to 30,000 only. This condition holds true for self occupied property only, but not in case of let out property. Do you know about this? Can you please confirm if my understanding is correct?

        If my registration date is June 2012, by when (date) must I have poseession to avail tax benefit on interest of 2 Lacs assuming it will be self occupied property on completion? As per my understanding, it should be March 2016. Can you please confirm this?

  • Rehbar ishaque

    Hi Jis,

    I have a home loan in pune where i stay and i also pay house rent for my parents who stay in chattisgarh. Can i get both HRA and home loan IT benefits ?

    • Jis

      Hi Rehbar,

      You wont be eligible for the HRA for the house rent that you pay for your parents.

      You can only claim benefits of the home loan

      Thanks

      GHA team

  • kapil

    Hi,

    My flat is under construction and possession is still pending. My query is related to pre-emi. I am paying on pre emi interest amount as such. Will I get tax benefit on this amount this year. I am about to submit my proofs, will a certificate from bank can help me tax benefit here.

    Thanks,
    Kapil

    • Jis

      Hi Kapil,

      You can avail the benefit after you have completed the registration and received possession.

      thanks

      GHA team

  • Arun Varma

    Hi,

    I have taken home loan of Rs 29,00,000, the EMI for the same is Rs 25,450.

    Here is the principal and interest payment detail:
    2014-2015
    Principal 11321
    Interest 294079
    Total 305400

    2013-2014
    Principal 41146
    Interest 264254
    Total 305400

    2012-2013
    Principal 0
    Interest 50900
    Total 50900

    I got the possession on last week of Oct,14 since it was under construction.

    1. Though the loan was sanctioned on 21st Dec’12, I got the 1st disbursement on 10th Jan’14 of Rs 26,00,00. Can I claim additional deduction of Rs 1 lakh on housing loan?
    2. I stayed in rented house for financial year 2014-2015 from April’14 to Oct’14. I shifted to my own flat by last week of Oct’14. In this case can I claim HRA (Rs 8333 * 7 months) ? Also can I claim the complete interest component of Rs 2,94,079 (2014-2015)? How should I claim both or one efficiently.
    3. I also want to claim the 2012-2013 interest paid. As per policy I can claim in 5 installments, so my 5 equal installment is Rs. 63,031. Now if I claim this as well then my total interest comes out 3,57,110 (294079+63031). This is crossing 2lakh for HL tax exemption. How can I save tax in this case, it means your interest per year should be low to accommodate the last years interest paid.

    Could you please help and clarify the above points.

    Regards,
    Arun Varma

    • Jis

      Hi Arun,

      The response to your queries are as follows

      1. If the loan was disbursed on 10th Jan’14 – how is there an interest out go in 2012-2013?

      2. You can claim the HRA till Oct’14. As regards the interest portion, from Oct’14 you can claim the benefit for the interest outgo. The interest paid before oct’14 will get capitalised and you can claim over the next 5 years.

      3. Yes the maximum limit is upto 2 lacs. Hence you won’t be able to claim the benefit above 2 lacs unless your interest component reduces in the event of any part repayment of the housing loan.

      thanks,

      Team GHA

  • Ali

    Hy,

    I have taken a house loan in which I am the main applicant and my father is the co-applicant. Also the flat is registered in both our names. The IT certificate from bank also has both our names. I wish to claim tax exemption for 50% of interest and principle of house loan. The concern is that the emi is paid via ecs from account of my father’s firm. I am a salaried person and my father a businessman. Can I claim tax benefits? Similarly I have an insurance policy which is solely in my name but payment of premium has been made by my father.Can I claim tax benefits?

    • Jis

      Hi Ali,

      You cannot claim benefits if the EMI is paid from your father’s firm. As regards your insurance policy, we would recommend that you consult a chartered accountant. However our initial guess is that a similar rule should apply and the insurance may be treated as a gift from your father and not part of your saving.

      Thanks

      Team GHA

  • Thushant

    Hello Jis,

    I have taken a top-up loan on my Home loan.

    The bank refused to give me provisional IT certificate for my top-up loan account, so how do I claim the principal component under section 80C?

    I had utilized the same for house construction, can you tell me the steps to make the claim next year?

    specifically, what should be the document from bank (similar to provisional IT certificate)?
    would a self attested declaration from my end suffice as proof that it was used for home construction?

    Thanks in advance.

    Thushan

  • Ashish

    Hi,

    1. I have 1st house which is self occupied and no outstanding loan on the same.

    2. 2nd house is bought using loan and currently given on rent:
    For FY 2014-15 say, following is the rent/interest details.

    a. Rent received : 1,92,500/-
    b. Interest Paid to Bank : 3,06,000/-

    Please confirm if my below understanding is correct for declaring TAX benefits:

    Income from house property = a – (30% of a) – b
    = 1,92,500 – 57,750 – 3,06,000
    = -171,250

    OR
    Income from house property = a – b
    = 1,92,500 – 3,06,000
    = -113,500

    Questions:
    1. Please confirm which of above understanding is correct?
    So in IT deceleration what should be mentioned:
    a. Interest on Housing Loan – Letout Property : -3,06,000
    b. Other Income : 1,92,500 or (1,92,500 – 30%)???
    2. Any other way by which tax can be reduced further, which I’m not aware of?

    • Jis

      Hi ashish,

      Your income will increase by 1,92,500 and the benefit of interest paid to bank maximum deductible is 200,000 lacs even if you are paying 3,06,000. However you would need to prepare your ITR form to see the effective benefit (theoretically, it will be INR 7500 i,e 192500 – 200,000)

      You can also claim deduction on the principal repaid.

      regards,

      Team GHA

  • Santosh

    Hi ,

    We have a property and planning for construction of a house. Property is in the name of my parents.

    Since, they are now retired and i am planning to take home loan for construction as a co-applicant.

    Now, my question is can i claim the amount for tax purpose. ?

    Thanks
    Santosh

    • Jis

      Hi Santosh,

      If you are transferring the property then only you can take a home loan for construction for which you can claim tax benefits. Else you would only be a guarantor to the loan and the house will be in your parents name.

      Thanks
      Team GHA

      • NIRMAL SINGH

        Hi
        Request you to reply on urgent basis.
        I want to avail benefit of 80EE all conditions met in my case only except one.
        My sanctioned loan was of 40 lac. But i was needed only 24 lac so bank disbursed only 24 lac and my balance payment towards builder is nill.so no need of further disbursement.
        In my case total disbursement is less than 25 lac but the sanctioned letter was of 40 lac.
        now can i avail the benefit of 80EE?

        • Jis

          Hi Nirmal,

          You can claim only for the disbursed amount.

          thanks

          Team GHA

  • KartikH

    Hello Jis , I have registered a property in Oct 2014 for which the Bank has just sanctioned the loan .My EMI will start after april 2015 . But I wanted to claim income tax benefits for the stamp duty and registration charges for financial year fy 2014-2015 .
    I did submit the sale deed and Registration reciept but was asked to provide Bank provisional certificate . How can I provide that when the loan is yet to be recieved . Is it really required or am I good with the sale deed and registration reciepts ? Please clarify .Thanks in advance

    • Jis

      Hi Kartik,

      The bank provision certificate is important to show the interest paid. A sale deed and registration wouldn’t show that you have a housing loan against the same.

      thanks

      Jis and team GHA

  • Aalok

    Hello Jis,

    I am done with agreement of under construction Property in Feb 2013 with value Rs. 39,40,000 and expecting it to complete by Mar 2016. Currently I am bearing Pre-EMI Interest every month of loan that is disbursed till date i.e. approx 24 lakhs.

    Kindly let me know if I can get tax benefit it under Sec. 80EE for under construction property as rest all the criteria are fulfilled.

    Thanks in advance..

    • Jis

      Hi Alok,

      You cannot get the benefit under sec 80 EE until you receive possession and registration is complete.

      thanks

      Jis and team GHA

  • Nilesh Tekade

    I have taken loan but property owner is my mother.she is a house wife,i am paying emi and agreement to be sign both.my mother is a applicant and I am a co applicant in loan.then I am taking benefit in income tax ot not.

    • Jis

      Dear Nilesh,

      We are sorry, we missed your query. If the property is in your mother’s name, then you cannot claim benefit in income tax on the home loan. For the same, you need to be a co-owner of the property.

      thanks

      Jis and team GHA

  • Nilesh Tekade

    Hi jis…..

    Waiting for your reply…

  • Amit Gupta

    Hi,

    I have a home loan on the name of my parent,brother and me , However the complete EMI amount is paid by me. Can i avail the tax benefit for complete home loan or not?

    • Jis

      HI amit,

      You can claim the benefit to the proportion of the property held. If you own only 1/3rd of the property, then you can claim benefit on only to that portion.

      thanks

      Team GHA

      • Amit Gupta

        Thanks Jis

  • Karthik

    Hi,

    I have booked a under construction property in May 2011 which had construction linked payment schedule, I took a housing loan during Mar 2012,
    Mar 2012 – 1 Lac disbursed
    2013 – 10 Lacs disbursed
    2014 – 19 Lacs disbursed

    I got the flat UDS registered during July 2014. I will be getting possession of my flat only by Oct 2015,

    So, What would be my Section 24 deduction allowed in my case, (please let me know if what if i am going to occupy or incase i leave it rent)

    I understand from few fourms that i am not eligible for higher deduction of 1.5 L because i have taken loan on Mar 2012 and flat is not completed by Mar 2015.

    My Question is, since the captial borrowed is 1 Lac in 2012, While rest of the capital was borrowed in next financial year, whether i will eligible for higher deduction if i get possession before Oct 2015,

    Thanks,
    Karthikram

    • Jis

      Hi Karthikram,

      As you would be only receiving the possession after March 15, you can claim the benefit from the next financial year FY 16. The Section 24 deduction is permitted only after you have completed the registration and you have received possession.

      Hope the above clarifies.

      thanks,

      Team GHA

  • Hi,

    I would like to know if I buy a vacation home in uttarakhand and give it on rent for shorter duration like 2 days or 1 day, will that be taken as income from business. Also what are the local rules and regulations i have to comply with

  • bhagwan

    hi
    i have two houses one AT dombivali (near kalyan) other is at badlapur both in MMRDA REGEION FIRST HOUSE LOAN IS COMPLETED IN 2014 SECOND HOUSE LOAN AT BADLAPUR IS RUNNING WHICH I HAVE GIVEN ON RENT PLEASE CLARIFY ME WHEATHER SECOND HOME PRINCIPLE PAID AMOUNT IS UNDER 80C CAN I TAKE TAX BENIFTE UNDER 80 C FOR SECOND HOME PEASE REPLY
    THANKS

    • Jis

      Hi,

      You cannot take benefit on the second home loan as both the house are in the same vicinity.

      thanks

      team GHA

  • Prems

    Hi,
    I took SBI realty loan with a condition of starting construction with in two year as per the terms i started the construction by availing one more home loan.Construction will complete by oct 2015,Do i eligible to claim tax benefits for both the loan for this financial year itself?

    • Jis

      Hi Prem,

      We are not able to understand your query. Can you provide more details about your loan. You mentioned 2 loans on the same property ?

      thanks
      team GHA

      • Prems

        First I have availed SBI realty loan for plot,SBI realty loan condition is the construction must start with in 2 years of loan sanction other wise it is treated as commercial loan.For the same plot ,construction purpose now i availed one more housing loan.As per their terms and condition i will complete the construction with in two year of SBI realty loan sanctioned date(oct 2013),construction will complete by this year (2015).The clarification is do i eligible to get tax benifits for both SBI realty loan and housing loan for this year onwards.

        • Jis

          Hi Prems,

          You can take tax benefit under section 24 as well as section 80EE on both the loans.

          Section 80 EE can be availed provided it is your first home and the value is less than 40 lacs.

          thanks,
          Team GHA

  • Chetna Agarwal

    I have a property in Kolkata for which I have taken a home loan along with my wife.
    Currently, I am living in Bangalore in a rented property. The flat in Kolkata is vacant.
    I have few queries:

    1. Can I declare my Kolkata flat as let out by choosing to declare rental value in order to avail unlimited tax benefit on interest under section 24 ?
    2. What documents will I have to provide given there will no rental agreement ?
    3. Can I take the benefit of HRA even after declaring my Kolkata house as let out ? I believe this is possible in case of self occupied but not clear about let out.
    4. Currently, EMI is getting deducted from my account. Then how my wife can avail tax benefit. Do we also need to define share of EMI we are paying ? If yes, then which document is required to show this share as the same is not mentioned in sale agreement.
    5. If total annual interest is 3.5 lakhs, then me and my wife both together can claim tax benefit on interest upto 3.5 lakhs or we both can individually enjoy tax benefit on interest upto 3.5 lakhs(i.e. total 7 lakhs). Pardon if it sounds silly :D.

    • Jis

      Dear Chetna,

      Our comments to your individual queries are as follows

      1. In order to avail income tax benefits on your home loan, you need not show that the house is rented out. If it is vacant, you need to add the notional (circle rate) rent as your income. For circle rate you need to contact a chartered accountant in kolkata

      2. As discussed above, you need not show it as rented out. You need to add the circle rate rent to your income

      3. Yes you can take benefit of HRA for the rent paid in bangalore You need not show the kolkata property as rented out.

      4. We would recommend that you make the account a joint account so that the account statement reflects both names. You can divide the payment based on the ratio you decide. No additional document is required. We are assuming that both the property and home loan are joint.

      5. No, you will have to divide the interest based either 50:50. The maximum limit per person is 1,50,000. We would suggest you read this article to get more clarity http://www.goodhomeadvisor.com/blogs/home-loan-tax-benefits-frequently-asked-queries/

      Thank

      Jis

      Team GHA

    • Jis Dejo

      Dear Chetna,

      Our comments to your individual queries are as follows

      1. In order to avail income tax benefits on your home loan, you need not show that the house is rented out. If it is vacant, you need to add the notional (circle rate) rent as your income. For circle rate you need to contact a chartered accountant in kolkata

      2. As discussed above, you need not show it as rented out. You need to add the circle rate rent to your income

      3. Yes you can take benefit of HRA for the rent paid in bangalore You need not show the kolkata property as rented out.

      4. We would recommend that you make the account a joint account so that the account statement reflects both names. You can divide the payment based on the ratio you decide. No additional document is required. We are assuming that both the property and home loan are joint.

      5. No, you will have to divide the interest based either 50:50. The maximum limit per person is 1,50,000. We would suggest you read this article to get more clarity http://www.goodhomeadvisor.com/blogs/home-loan-tax-benefits-frequently-asked-queries/

      Thank

      Jis

      Team GHA

  • Dilip

    I have some doubt on home loan tax benifits

    Scenario
    We (Me & my Wife) having Saving Account in SBI Bank (invididual and seperate account)
    We have taken home loan from ICICI Bank (we do NOT have any saving account in ICICI)

    Cheques while processing has been given from my SBI account
    Now we both (me & wife) are working and wish to claim tax benifits

    1) Do i need to add my wife’s name in my saving account ?(as join account holder ?)
    2) or we can pay our EMI via individual account and claim tax benifit ?
    3) we both can claim tax benifit (1.5 lacs + 2.00 lacs) = 3.5 lacs ?
    means i will deduct 3.5 lacs from my income and my wife can deduct 3.5 lacs from her income ?
    or we need to deduct 1.75 lacs from our income ?

    hope to get a reply on NagarDilipNagar@gmail.com

    • Dilip

      no one to reply ?

    • Jis

      Dear Dilip,

      For the loan, the bank would be taking one account for ECS. That account should be a joint account.

      Both you and your wife can claim the total benefits upto 3.5 lacs (1.5 + 2.0 )subject to the principal repayment and interest being repaid in a year coming to (3.0 ad 4.0 ) lacs.

      regards,

      Team GHA

  • Balvinder Kumar

    suppose i have taken home loan on 2013 and expected possession is on 2019, then can i avail tax deduction for interest repayment of home loan and how much.

    • Jis

      No tax deduction can be taken only after possession

  • Brij Gopal Garg

    Sir,
    I am working in central govt services (CWC) at New Delhi. I had purchased a 5 year old ready to move house ( 08/2016 and taken key ) at Haldwani (Nanittal) registry made in favor of my wife (House wife & fully depend on me) amounting to Rs. 36 Lakh + registry expenditure Rs. 1.64 Lakh + loan expenditure 0.26 Lakh Total amount Rs. 37.90 Lakh. I had taken advance from my GPF for above house Rs. 7.90 Lakh as margin money. Loan taken from LIC–Home loan Rs. 30 Lakh at EMI Rs. 27950/- per month for 20 year. Due to length of my service (below 3 year) LIC-HL sanction loan Rs. 30 Lakh in favor of My wife (Applicant), Myself and My son (Co-applicant) working in private org at Gurgaon & his services balance about 28 years).
    Can I take I-tax exemptions u/s 80cc & U/S 24 along with additional special rebate Rs.50,000/- Or my son can be take up the same.
    Now I want your help about Income-tax rebate as per current directions of CBDT. Thanking yours.
    Bggarg- Ph. 9891941499, e-mail bggarg123@gmail.com

  • JIMMY smith

    Taking a Home Loan to buy a property is indeed a very wise financial decision.As many people can’t afford to buy property so they take help from the bank and give money to the lender. They return the loan through EMI’s. It’s a good way to buy the property.