Claim Home Loan Interest Deduction Under Section 24(b)
A home loan can help you save tax on the interest you pay every financial year. Under Section 24(b) of the Income Tax Act, eligible homeowners can claim a deduction on home loan interest while filing their ITR under the Old Tax Regime.
How Much Deduction Can You Claim?
| Property Type | Maximum Deduction Eligibility?? |
| Self-occupied home | Up to ??? 2 lakh per financial year |
| Rented home | Can deduct the actual interest paid on the home as per the Income Tax Act. |
Conditions Before Claiming??
- The deductions can be availed only on the interest portion of the home loan.
- The property should be built within 5 years from the end of the financial year in which the loan was sanctioned for a self-occupied residential property.
- A home loan certificate is required.
- Each homeowner can claim separate deductions in case of a joint home loan.
- To claim the deduction, eligibility is crucial under the Income Tax Act.
Key Pointers
- You can claim a deduction on the interest paid on your home loan.
- Up to ???2 lakh per financial year can be claimed for self-occupied homes
- There is a difference in the deduction that can be made under the Income Tax Act on rented properties.
Save Tax on Home Loan Principal, Stamp Duty and Registration Charges as per Section 80C
If you purchased a new house, you can take a tax deduction on the principal repayment, stamp duty and registration charges as per Section 80C of the Income Tax Act.
Section 80C allows up to ???1.5 lakh deduction per year with certain conditions.
How Much Deduction Can You Claim?
| Expense | Maximum Deduction Eligibility |
| Home loan principal repayment | Section 80C deduction is allowed for this repayment |
| Stamp duty | Eligible for deduction under Section 80C |
| Registration charges | Section 80C deduction is allowed for such investments |
Conditions Before Claiming??
- This is a tax deduction in the Old Tax Regime.
- Once construction is completed, then only the principal of the home loan repayment will be eligible.
- Stamp duty and registration charges may be claimed for that financial year if they have been paid in that year.
- There is a requirement to have payment receipts and loan documents.
Key Pointers
- Principal, stamp duty and registration charges for a home loan are the tax benefits under Section 80C.
- Maximum deduction permissible is up to ???1.5 lakh per financial year.
- Stamp duty and registration charges can be claimed once in the year paid.
- Please review eligibility before claiming tax benefits
Claim Pre-Construction Interest After Taking Possession of Your Home
You can claim a tax deduction on the interest paid before the construction is completed if you take a home loan for an under-construction property.??
This is known as pre-construction interest. Only when possession is received can you claim it, or after the construction is completed, subject to conditions under the Income Tax Act.
How Much Deduction Can You Claim?
- You can claim the pre-construction interest in 5 equal installments
- The deduction starts from the financial year in which the construction is completed or if possession is received
- According to the limitations and conditions under Section 24(b), you can claim a deduction
| Total pre-construction interest | Claim every year?? | Duration |
| ???5 lakh | ???1 lakh | 5 years |
Conditions Before Claiming
- Can claim once the construction is completed or the possession is received
- Pre-construction interest is claimed in 5 annual instalments
- Home loan certificate and possession documents are mandatory
- The tax can be claimed under conditions with the Income Tax Act
Key Pointers
- Pre-construction interest is the interest paid before your home is ready
- You can claim 5 yearly instalments after possession
- The deduction is available only after the construction is completed
- Home loan and possession documents are mandatory for ITR filing
- Check eligibility before claiming
Maximise Tax Savings with a Joint Home Loan and Joint Ownership
You and the co-owner both can save more tax if you are buying a home jointly. You can claim deductions separately if you both, the co-owner and owner, take the home loan, subject to conditions under the Income Tax Act.
How Much Deduction Can You Claim?
| Maximum Deduction Eligibility?? | Maximum Tax Benefit (Per eligible co-owner) |
| Home loan interest- Section 24(b) | Up to ???2 lakh |
| Home loan principal- Section 80(c) | Up to ???1.5 lakh |
Subject to the conditions under Section 24(b)
The Section 80C limit includes all eligible investments and expenses.
Conditions Before Claiming
- Both applicants must be co-owners
- Both applicants must be co-borrowers of the loan
- Each applicant should repay their share of the home loan
- Each co-owner can claim tax benefits when the amount is paid
- Home loan documents and ownership proof are mandatory while filing your ITR
Key Pointers
- Joint home loans help eligible co-owners save more tax
- Each eligible co-owner can claim tax deductions separately
- Tax benefits are available only if both applicants are owners and co-owners
Save Capital Gains Tax by Reinvesting Under Sections 54 and 54EC
You can save tax by reinvesting the gains when you sell a residential property and make a long-term capital gain. It completely depends on your eligibility; you are entitled to claim tax benefits under Section 54 or Section 54EC of the Income Tax Act.
Difference Between Section 54 and Section 54EC
- Section 54: You should buy or construct another eligible residential property to claim tax on long-term capital gains
- Section 54EC: Invest your long-term capital gains in eligible 54EC bonds within 6 months of selling the property to claim a deduction
When Can You Claim the Tax Benefit?
- You sold a long-term residential property
- You have earned long-term capital gains from the sale
- You reinvest the gains as per the conditions under Section 54 or 54EC
- Eligible under the Income Tax Act
Key Pointers
- Reinvest to reduce your tax liability
- Section 54 is to buy or construct another eligible property
- Section 54EC is for investments in eligible bonds
- Investment and property documents are mandatory while filing your ITR
- Should be eligible under the Income Tax Act
FAQs
Can someone claim both Section 24(b) and Section 80C for the same home loan?
Yes, eligible taxpayers can claim Section 24(b) for home loan interest and Section 80C for principal repayment under the conditions of the Income Tax Act.
What is pre-construction interest?
Pre-construction interest is the home loan interest paid before the construction of the property or when possession is received.
Is it possible for both co-owners and the owner to claim tax benefits on a joint home loan?
Yes, both co-owners and owners can claim tax benefits separately if they are also co-borrowers of the home loan and eligible under the Income Tax Act.
Are home loan benefits available under the New Tax Regime?
Home loan tax benefits are not available for self-occupied properties under the New Tax Regime.
Which documents are required to claim home loan tax benefits?
Home loan interest certificate, loan statement, possession certificate, and payment receipts are the required documents to claim home loan tax benefits under the prescribed conditions.
