EMIs (elementary month by month installmets) contains two parts – a persons vision portion and principal amount. Interest paid is allowed as being a tax benefit under section 24(b) (subject to restrictions), whilst the principle amount repaid is allowed like a deduction under section 80C.
Maximum tax deduction for repayment principal component of 二胎 can’t exceed Rs 1,00,000 under section 80C. One should take into account that other investments/contributions may also be allowed as being a deduction under section 80C, and this limit of Rs. 1,00,000 refers to all of them come up with.
Housing loan interest deduction, however, is allowed up to and including maximum quantity of Rs 1,50,000 under section 24(b). However, the acquisition or construction of the home property ought to be completed within three years from the end of economic year through which loan was taken; otherwise, the level of interest benefit allowed is just up to Rs 30,000.
Furthermore, the aforementioned tax deduction limit u/s 24(b) can be applied only for self-occupied house property. In case of let-out or deemed to be let out house property, interest is deductible without limit.
Some say that deduction on principal part of home loan under section 80C is allowed after one starts repaying the mortgage. Some say deduction is allowed only one time the construction is done. The law isn’t absolutely clear on the matter; hence the ambiguity remains.
Interest deduction on housing loans under section 24(b) is allowed only on acquisition or completion of the home property. However, interest deduction for pre-acquisition or pre-construction period is also allowed but only after acquisition or construction is complete. It is allowed in 5 equal annual installments. But even after including the above, the whole deduction ought not exceed Rs. 1,50,000 per annum.
Unlike section 24(b), Section 80C doesn’t allow tax deduction for mortgages taken from friends and relatives. For claiming tax benefit on principal part of the mortgage under section 80C, you should borrow only from your lenders specified in that section. There is no such restriction under section 24(b) of the IT Act for claiming tax benefit on interest component of the housing loan.
Home improvement Deduction under section 80C for principal portion of the housing loan EMI is just not allowed if the house loan borrowing is made for the purpose of reconstruction, renewal or repair of house property. Put simply, tax benefit under section 80C is just allowed for purchasing or constructing a fresh home. In contrast, deduction for Interest is allowed under section 24(b) even for the borrowed funds taken for the goal of repair, renewal or reconstruction of existing house property but subject to the limit of Rs 30,000 in the event of self-occupied house property. In case of discrete house property, actual interest is allowed without the ceiling.
Tax benefit u/s 80C can be claimed only once the actual payment is made. Interest deduction u/s 24(b), on the other hand, is allowed on accrual or due basis. Put simply, unlike principal portion, interest deduction may be claimed even if not paid.
The tax benefit under section 80C is allowed at the mercy of the condition the said house property shouldn’t be sold before a time of 5 years. If you violate this, the deduction will probably be discontinued along with the entire tax deduction claimed in earlier years under section 80C – for repayment of principal component of the home loan – will probably be deemed to become your income in the year in which you sell the house. However, the identical doesn’t apply for the housing loan interest deduction claimed under section 24(b).
Tax benefit on interest element of the home loans u/s 24(b) is allowed not just for original mortgage but also for subsequent loan(s) delivered to refinance the initial loan. In short, if the new housing loan is taken to pay off an existing housing loan, tax benefit under section 24(b) is allowed. However, devspky87 section 24(b), there is absolutely no specific mention under section 80C for prepayment of existing home loan by taking a fresh house loan.
So just what it means is the fact that when you repay the balance outstanding principal portion of your existing 房屋二胎 by taking a second mortgage loan, you will be entitled for tax deduction under section 80C but inside the overall limit of Rs one lakh. Further, if you subsequently start repaying your second housing loan, you will end up entitled for tax benefit only on the interest portion u/s 24(b) and not for the repayment of principal component u/s 80C.