Section For Interest On Housing Loan

Deductions under section 24.

Section for interest on housing loan. Property construction property purchase. Such deduction is allowed on accrual basis not on paid basis. In respect of self occupied house property interest deduction under section 24 b is restricted to 200000.

Deductions for home loan interest repayment are offered under various sections of the income tax law. Such loan should be taken for purchase or construction or repair or reconstruction of house property. Under the provisions of the section home buyers can save an additional rs 1 50 lakhs per year towards the interest paid on home loans over and above the rs 2 lakhs that they already save under section 24 b.

1 deduction for interest paid on housing loan a home loan must be taken for the purchase construction of a house and the construction of the house must be completed within 5 years from the end of financial year in which loan was taken. If you are paying emi for the housing loan it has two components interest payment and principal repayment. Section 24b of income tax act allows deduction of interest on home loan from the taxable income.

50 000 during a financial year. Deductions allowed on home loan interest. It is over and above the deduction of rs 2 00 000 available under section 24 b for interest paid in respect of loan borrowed for acquisition of a residential house property.

In respect of self occupied house property interest deduction u s 24 b is restricted to rs 2 00 000. As we have already understood there are three sections section 24 section 80ee section 80eea which allow the taxpayer to penetrate interest paid on home loan under exemption head. Interest paid on housing loan is allowed as a deduction to the extent of rs 2 lakhs in respect of self occupied property.

The income tax benefits on interest on housing loan are covered under section 24 and section 80ee of the income tax act. Section 80ee proposes an additional deduction of rs 50000 in respect of interest on housing loan to the first time house owners who own the house of rs 50 lakh or less and has taken the home loan amount of less than or equal to rs 35 lakh. Section 80ee deduction on home loan interest tax deduction under section 80ee of the income tax act 1961 can be claimed by first time home buyers for the amount they pay as interest on home loan.