Deductions on housing Loan

Deductions on housing loans in India are available under several sections of the Income Tax Act, 1961. Here are some of the key deductions related to housing loans:

  1. Section 24(b): Interest on Housing Loan:
    • Under Section 24(b), you can claim a deduction on the interest paid on a housing loan for a self-occupied or rented-out property.
    • For a self-occupied property, the maximum deduction allowed is up to Rs. 2 lakh per annum.
    • For a property that is rented out or deemed to be rented out, there is no upper limit on the deduction for interest paid on the housing loan.
  2. Section 80C: Principal Repayment:
    • The principal amount repaid towards the home loan is eligible for deduction under Section 80C, within the overall limit of Rs. 1.5 lakh per annum along with other eligible investments.
    • This includes the repayment of the principal amount through EMIs (Equated Monthly Installments) or lump sum payments.
  3. Section 80EEA: Additional Deduction on Interest on Housing Loan:
    • This section provides an additional deduction of up to Rs. 1.5 lakh on interest paid on housing loans sanctioned between April 1, 2019, and March 31, 2023, for the purchase of affordable housing.
    • The total interest deduction under Sections 24(b) and 80EEA combined cannot exceed Rs. 3.5 lakh per annum for affordable housing loans.
  4. Section 80EE: First-time Homebuyers:
    • This section offers an additional deduction of up to Rs. 50,000 on interest paid on housing loans for first-time homebuyers.
    • The loan amount must be less than Rs. 35 lakh, and the value of the residential property should not exceed Rs. 50 lakh.
    • This deduction is available over and above the deductions available under Sections 24(b) and 80C.
  5. Section 80EEB: Interest on Electric Vehicle Loan:
    • This section provides a deduction of up to Rs. 1.5 lakh on the interest paid on loans taken for the purchase of electric vehicles, including electric cars, electric scooters, etc., sanctioned between April 1, 2019, and March 31, 2023.

These deductions are subject to certain conditions and limits specified by the Income Tax Act. Taxpayers should ensure compliance with the requirements and keep proper documentation to claim these deductions effectively. It’s also advisable to seek guidance from a tax consultant or financial advisor for personalized advice regarding tax planning related to housing loans. You can also contact us at ebex consulting if you are looking for any type of advice regarding deduction on Housing loan or ITR filling services in Gurgaon.


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