Home loan and its benefits as per Income Tax Act - Professionals - Taxation - TIK Share
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Home loan and its benefits as per Income Tax Act


CA Pulkit Sharma

2013-12-29

Need to buy a home and first thing comes to mind is Money. Real estate prices are up every year and it is becoming very difficult to own a house.

Home Laons comes as helping hands in this situation.

Home Loans not only help you in buying the house but helps you in saving the taxes!!!

Income Tax Act provides many examptions and deductions for repayment or Principal amount and also for payment of Intrest part.

The different section that provides tax reliefs are:

Section 24: This section provides dedcution of Interest portion paid on home loan. The limit is 1,50,000 for self occupied property and no limit for letout properties.

Section 80EE: Applicable from 1st April 2013. This section allows deduction for payment of intrest upto 100,000. Points to be noted are:

The Loan is sanctioned between 1 April 2013 and 31 March 2014

The Amount of Loan sanctioned for the acquisition of Residential House Property does not exceed Rs. 25,00,000 

The Value of the Residential House Property does not exceed Rs. 40,00,000

The Assessee does not own any House Property on the date of sanction of Loan

 

Section 80: The maximum deduction allowed is only upto 100,000. This section allows deduction for repayment of principal amount. This 100,000 limit includes other deductions available under section 80C.

A summary of these section is:

Conditions 80C  24 80EE
 Deductible for  Repayment of Loan  Payment of Interest Buying of Property
 Limit  100,000  No-Limit on Let-Out properties
Limit of 1,50,000 on self occupied properties
100,000
 Purpose  purpose of Purchase/ Construction/ Repair/ Renewal/ Reconstruction of a Residential House Property  purpose of Purchase/ Construction/ Repair/ Renewal/ Reconstruction of a Residential House Property Residential House Property
 Eligibility  NA  Construction should be completed within 3 years Read above
Sale Should not be sold within 5 years. Na Read Above