Five things to know about tax benefits on home loan interest
1. The interest component in the EMI can be claimed as deduction from "income from house and property" under Section 24 of the Income Tax Act.
2. The maximum tax deduction allowed under Section 24 is Rs 2 lakh for self-occupied property and if the property is not self-occupied, there is no maximum limit.
3. The interest payments for the year shall result in a loss under the head "income from house property" which can be adjusted in the same year against other heads of income including salary.
4. If the property is not completed within three years from when the loan was taken, then the interest benefit drops to rs 30,000.
5. The pre-construction interest can be claimed from the year when the construction is complete in five equal instalments.
2. The maximum tax deduction allowed under Section 24 is Rs 2 lakh for self-occupied property and if the property is not self-occupied, there is no maximum limit.
3. The interest payments for the year shall result in a loss under the head "income from house property" which can be adjusted in the same year against other heads of income including salary.
4. If the property is not completed within three years from when the loan was taken, then the interest benefit drops to rs 30,000.
5. The pre-construction interest can be claimed from the year when the construction is complete in five equal instalments.
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