Home Loan Interest Repayment – Section 24

by Gopal Gidwani on August 22, 2009 · 2 comments

in Taxation,Uncategorized

• 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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{ 2 comments… read them below or add one }

Sivasankari September 22, 2011 at 7:33 am

Thanks for the info sir. its very useful.

I just wanted to know, if my house is under construction and I am just started paying my pre-EMI, will that inreset cannot be shown for tax saving. Please let me know



Gopal Gidwani December 2, 2011 at 7:34 pm

For a house under construction the interest benefit cannot be claimed for tax deduction. Once you get the possession, the interest paid till the time of possession can be used to avail deduction from taxable income for the next 5 years by claiming 20% every year


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