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Deduction of Principal of Housing loan and Its Interest
Deduction under SEC-80C (Only For Principal Loan Repayment)
Principal repayment component of up to Rs. 1,50,000 can be clubbed under the overall limit for tax saving instruments eligible under Section 80C.Available only for purchase or construction of residential propertyDeduction available only for self occupied property.Deduction is available only when actual payment is done(i.e on cash basis and not on accrual basis), so the principal portion unpaid EMI and EMI’s accrued is not eligible for deductionTax Deduction claimed would be reversed if Property sold within 5 years from the end of financial year in which such property is acquired by him.
Section 24 (Only for Interest Component)
Deduction is available on Accrual basis.Deduction available if loan taken for the purpose of Purchase/ Construction/ Repair/ Renewal/ Reconstruction of a Residential House Property.Annual Interest component of up to Rs. 2,00,000(Rs. 3,00,000 for senior citizens) can be claimed as deduction against income.(If completed within 3 years from the end of F.Y, If Not then deduction will be reduced to Rs 30,000)No maximum Limit if Not a Self occupied Property.
Deduction under 80EE (Interest Component Only)
Additional tax deduction of Rs 50,000/- is available to First time home buyers in respect of Interest on home loan.(This deduction will be over and above the deduction limit of Rs 2,00,000 allowed for self-occupied properties under section 24b of the Income Tax Act 1961.)
Conditions:-
- This is your 1st house purchased.2) Value of this house is Rs 40 lakhs or less.3) Loan taken for this house is Rs 25 lakhs or less.4) Loan has been sanctioned by a Financial Institution.
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Summary Of Deductions for Interest Component
Summary For Section 24 and 80C
Non-SOP=No limit
