Home loan exemption
This query is : Resolved
17 March 2015
Dear All,
I have two Home and both secured in Home Loan.
Please tell me which amount exempt under Income Tax.
u/s 24 and u/s 80c
I have two Home and both secured in Home Loan.
Please tell me which amount exempt under Income Tax.
u/s 24 and u/s 80c
17 March 2015
Both are eligible.Subject to the ceiling limit as mentioned from the respective sections.
17 March 2015
But Moksha Kalyan sir i am not living in both home . and respective section says that
Under 80c both principal amount are exempt.
but
under sec 24, if more than one home so one is self occupied and second is let out property.
If assume one is self occupied. it is ok.
but
second assume is let out than what about rentable value.
Under 80c both principal amount are exempt.
but
under sec 24, if more than one home so one is self occupied and second is let out property.
If assume one is self occupied. it is ok.
but
second assume is let out than what about rentable value.
28 July 2024
Here's a detailed explanation of the tax implications for home loans under Sections 24(b) and 80C when you have two homes, both of which are secured by home loans:
### **1. Interest Deduction on Home Loan (Section 24(b))**
**a. Self-Occupied Property:**
- **Limit:** You can claim a deduction of up to ₹2,00,000 per annum on the interest paid on the home loan for a self-occupied property.
- **Conditions:** This deduction is available if the property is self-occupied or is vacant.
**b. Let-Out Property:**
- **Limit:** For a property that is let out, there is no upper limit on the amount of interest that can be claimed as a deduction. You can claim the entire interest paid on the home loan.
- **Rentable Value Considerations:** The rental income from the let-out property is taxable under the head "Income from House Property." The amount of interest claimed as a deduction under Section 24(b) will reduce the taxable rental income.
**c. Properties Not Used for Residential Purposes:**
- If both properties are not self-occupied (for example, if both are let out or one is let out and the other is vacant), the interest deduction on both properties can be claimed without the ₹2,00,000 limit per property.
### **2. Principal Repayment Deduction (Section 80C)**
**a. Limit:** You can claim a deduction of up to ₹1,50,000 per annum on the principal repayment of home loans under Section 80C, irrespective of the number of properties. This limit is a combined cap for all eligible investments under Section 80C, which includes principal repayment on home loans, life insurance premiums, PPF contributions, etc.
**b. Properties Covered:** The deduction is available for principal repayment on home loans for both self-occupied and let-out properties.
### **Scenario Breakdown**
- **Property 1: Self-Occupied**
- **Interest Deduction:** You can claim up to ₹2,00,000 per annum.
- **Principal Repayment Deduction:** Up to ₹1,50,000 per annum.
- **Property 2: Let-Out**
- **Interest Deduction:** You can claim the entire interest amount paid, with no upper limit.
- **Principal Repayment Deduction:** Up to ₹1,50,000 per annum (part of the overall ₹1,50,000 limit for all Section 80C deductions).
**Tax Impact:**
- **Self-Occupied Property:**
- If the property is not rented out and is used for personal residence or is vacant, you can claim up to ₹2,00,000 for interest deduction.
- **Let-Out Property:**
- The rental income from the property is taxable, but you can deduct the entire interest on the loan from this income. This will reduce the taxable rental income.
**Overall Claim:**
- **Interest on Loans:** Deductible according to the above limits, with no restriction for let-out properties.
- **Principal Repayment:** Combined limit of ₹1,50,000 across all Section 80C investments.
This structure allows you to maximize deductions on both the interest and principal repayments, benefiting from the tax reliefs available under the Income Tax Act.
### **1. Interest Deduction on Home Loan (Section 24(b))**
**a. Self-Occupied Property:**
- **Limit:** You can claim a deduction of up to ₹2,00,000 per annum on the interest paid on the home loan for a self-occupied property.
- **Conditions:** This deduction is available if the property is self-occupied or is vacant.
**b. Let-Out Property:**
- **Limit:** For a property that is let out, there is no upper limit on the amount of interest that can be claimed as a deduction. You can claim the entire interest paid on the home loan.
- **Rentable Value Considerations:** The rental income from the let-out property is taxable under the head "Income from House Property." The amount of interest claimed as a deduction under Section 24(b) will reduce the taxable rental income.
**c. Properties Not Used for Residential Purposes:**
- If both properties are not self-occupied (for example, if both are let out or one is let out and the other is vacant), the interest deduction on both properties can be claimed without the ₹2,00,000 limit per property.
### **2. Principal Repayment Deduction (Section 80C)**
**a. Limit:** You can claim a deduction of up to ₹1,50,000 per annum on the principal repayment of home loans under Section 80C, irrespective of the number of properties. This limit is a combined cap for all eligible investments under Section 80C, which includes principal repayment on home loans, life insurance premiums, PPF contributions, etc.
**b. Properties Covered:** The deduction is available for principal repayment on home loans for both self-occupied and let-out properties.
### **Scenario Breakdown**
- **Property 1: Self-Occupied**
- **Interest Deduction:** You can claim up to ₹2,00,000 per annum.
- **Principal Repayment Deduction:** Up to ₹1,50,000 per annum.
- **Property 2: Let-Out**
- **Interest Deduction:** You can claim the entire interest amount paid, with no upper limit.
- **Principal Repayment Deduction:** Up to ₹1,50,000 per annum (part of the overall ₹1,50,000 limit for all Section 80C deductions).
**Tax Impact:**
- **Self-Occupied Property:**
- If the property is not rented out and is used for personal residence or is vacant, you can claim up to ₹2,00,000 for interest deduction.
- **Let-Out Property:**
- The rental income from the property is taxable, but you can deduct the entire interest on the loan from this income. This will reduce the taxable rental income.
**Overall Claim:**
- **Interest on Loans:** Deductible according to the above limits, with no restriction for let-out properties.
- **Principal Repayment:** Combined limit of ₹1,50,000 across all Section 80C investments.
This structure allows you to maximize deductions on both the interest and principal repayments, benefiting from the tax reliefs available under the Income Tax Act.
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