Deduction of Principal of Housing loan and Its Interest

Deduction Of Principal of Housing loan and Its Interest Element. Now you can scroll down below and examine complete information regarding ” Reduction of Principal of Real estate loan and Its Interest”

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Reduction of Principal of Housing loan and Its Interest

Reduction under SEC-80 C ( Just For Principal Loan Payment)

  • Principal repayment component of up to Rs. 1,50,00 0 can be clubbed under the total limit for tax saving instruments qualified under Area 80 C.
  • Available only for purchase or building of home
  • Deduction available just for self inhabited residential or commercial property.
  • Deduction is available just when real payment is done( i.e on money basis and not on accrual basis), so the primary part unpaid EMI and EMI’s accrued is not qualified for reduction
  • Tax Reduction claimed would be reversed if Property sold within 5 years from the end of financial year in which such property is acquired by him.

Area 24 ( Only for Interest Element)

  • Deduction is readily available on A ccrual basis.
  • Reduction available if loan taken for the purpose of Purchase/ Construction/ Repair Work/ Renewal/ Reconstruction of a Residential House Property. 3,00,00 0 for senior residents) can be claimed as reduction against earnings.

    Deduction under 80 EE ( Interest Element Just)

    • Extra tax deduction of Rs 50,00 0/- is available to First time home buyers in regard of Interest on home loan.( This deduction will be over and above the deduction limit of Rs 2,00,00 0 permitted self-occupied properties under section 24 b of the Income Tax Act 1961.)

    Conditions:–LRB-

  • 3) Loan taken for this house is Rs 25 lakhs or less.
  • 4) Loan has actually been sanctioned by a Financial Institution.

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    Summary Of Deductions for Interest Element

    Details Self Inhabited Home Non-Self Occupied Residential Or Commercial Property
    Section 24 Rs 2,00,00 0 No Limit
    Section 80 EE Rs 1,00,00 0 Rs 1,00,00 0

    Summary For Section 24 and 80 C

    Particulars Section 24 Area80 C
    Tax Deduction Allowed Interest Principal Quantity
    Basis Of Tax Deduction Accrual Basis Paid basis
    Quantum SOP= 2,00,00 0.

    Non-SOP= No limit

    Rs 1,50,00 0
    Function Of Loan Purchase/ Building/ Repair/ Renewal/ Reconstruction of a Residential House Home. Purchase/ Building and construction of a new House Property
    Eligibility of Declaring Tax reduction Purchase/ Building and construction should be finished within 3 years N/A
    Limitation on sale of property N/A Tax Deduction declared would be reversed if Home sold within 5 years

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