Benefit on housing loan and limit)

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Benefit on housing loan and limit)

  1. 1. Benefits under section 24(b) and 80C of Income Tax Act against Housing Loan and Its Limit. By Shankar Bose Inspector of Income-tax MSTU, Puri
  2. 2. Benefits under section 24(b) and 80C of Income Tax Act against Housing Loan and Its Limit.There are no changes proposed in respect of deductionavailable towards principal repayment & interestpayment u/s 24(b) or U/s 80C of the Income Tax Act-1961. For the mass benefit the principal amount ofHouse Loan Repayment & interest thereon as under:Interest payable on Home loan: U/s 24(b) of the Income Tax Act-1961, deduction up to Rs. 150,000/- is admissible against the interest payable on the loan availed for purchase / construction of the self occupied house property.[However, the acquisition or construction of the house property should be completed within 3 years from the end of financial year in which home loan was taken; otherwise, the deduction would be restricted to Rs. 30,000/-] In respect of loan taken prior to 01.04.1999, the deduction can’t exceed Rs. 30,000/-.
  3. 3. Pre-construction period Interest [Loan taken against/for under construction property]: The interest paid during the period the house property is under construction is not deductible in the year of payment. Interest in respect of pre-construction period is deductible in five equal annual installments commencing from the previous year in which the house is constructed/acquired. For this purpose “pre-construction period” means the period commencing on the date of borrowing and ending on March 31 immediately prior to the date of completion of construction /acquisition. In respect of self occupied house property, it may be noted that for purchase / construction, interest deduction is admissible up to Rs. 1.50 Lacs whereas there is a ceiling of Rs. 30,000/- only in respect of loan taken for Repairs/ Renewal or Reconstruction.Principal repayment of the home loan:In respect of principal repayment of home loan,deduction is admissible u/s80C. Overall deduction U/s80C (which also includes deduction towards LIC/ PPF,Tuition fees etc) can’t exceed Rs. 1 Lacs Thanks

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