• An individual can claim tax benefits on the principal repayment as well as the interest repayment on a home loan.
• The principal repayment of upto INR 1,00,000 qualifies for deduction from taxable income under Section 80C. The interest repayment of upto INR 1,50,000 qualifies for deduction from taxable income under Section 24(b) for a self occupied property.
• To avail the benefit of upto INR 1,50,000, the acquisition or construction of the house property should be completed within 3 years of the year in which the home loan was taken. Else only INR 30,000 will qualify for deduction for interest repayment.
• Also the amount of INR 1,50,000 for interest repayment qualifies for deduction for self occupied property.
• In case of a property that is let out or given on rent, the entire interest repayment amount qualifies for deduction from taxable income without any limits.
• The deduction on the principal component of the home loan can be availed as soon as the borrower starts repaying the home loan. The borrower need not wait till the acquisition or completion of the house property.
• The interest repayment deduction under Section 24 can be availed after the completion or acquisition of the house property.
• The interest deduction for pre-acquisition or pre-construction period can be availed after the acquisition or construction is complete. This benefit can be availed in 5 equal instalments (20% each year) in 5 years.
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