1. HOUSING FINANCE & TAX PLANNING
No Housing Loan Housing Loan taken for Purchase/
Construction of Residential Unit on or after 1st
April1999 for Self-occupation
Income declared in ITR Rs. 4,50,000 Rs. 4,50,000
Contributions eligible for deduction
under section 80C of the Income
Tax Act, 1961
Rs. 1,00,000 Rs. 1,00,000
Interest paid on Housing Loan
during F.Y. 2006-07
- Rs. 1,68,000
Interest paid on Housing Loan
during F.Y. 2006-07
- Rs. 1,68,000
Repayment towards principal
amount of housing loan during F.Y.
2006-07
Rs. 21,000
Basic Tax Liability, excluding
surcharge & education cess as per
Income Tax Slabs & Rates
applicable to A.Y. 2007-08
Rs.
54,000
[On
Net
Incom
e of
Rs.
3,50,0
00
(i.e.,
Rs.
4,50,0
00 -
Rs.
1,00,0
00]
Rs. 14,000 [On
Net Income of Rs.
2,00,000 (i.e., Rs.
4,50,000 - Rs.
1,50,000 {max.
permissible Dedn.
towards Interest} -
Rs. 1,00,000 (max.
permissible dedn.
under Sec. 80C,
80CCC, &
80CCD}]
Suppose in the above Case, the Income of Rs. 4,50,000 included Rs. 30,000 as rental income from the property
purchased/constructed with the Loan, the basic tax liability could have reduced to Rs. 8,600 [On Net Income of Rs. 1,74,800 (i.e.,
Rs. 4,50,000 - Rs. 9,000 {Standard Deduction @ 30% of Rs. 30,000 under Section 24 (a) 1 -Rs. 1,68.0(H) {full interest amount
as property is rented out) -Rs. 1,00.000].
However, the man had taken the loan before 1st April, 1999 &/or taken the loan for repairs/renovation/reconstruction, his basic
tax liability for A.Y. 2007-08 would have been Rs. 45,000 [On Net Income of Rs. 2,00,000 (i.e., Rs. 4,50,000 - Rs. 30,000
(Maximum permissible Deduction towards Interest) - Rs. 1,00,(XK) {Maximum Permissible Deduction under Sections 80C,
80CCC, & 80CCD)].