Interest on housing loan
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
19 February 2013
We have a house which is in my Fathers name. Now we want to demolish the house and reconstruct a new one for this i want to approach a bank for a loan. My query here is the interest i pay on my housing loan is deductible for me U/s 24 or not . and if yes how much i.e., 30000 or 1500000 which limit is applicable for me. and the principle is deudctible for me u/s 80C or not. and I have a younger brother too who is a student. Whether before approaching bank shall i register the house in my name or can it be in my fathers name and i can approach the bank for a loan . kindly suggest me in this regard. I shall be thankful for the same .
19 February 2013
The assessee can claim interest on housing loan upvto Maximum of Rs.1.50lakhs in case of self occupied property and the actual interest in case of let out property.But such claim of interest is given when the income from such house is taxable under the head Income from house property.In your case the ownership is in your father;s name. Hence you are not eligible, though you may stand as a co-obligant for the housing loan.
Querist : Anonymous
Querist :
Anonymous
(Querist)
27 February 2013
what about if the house is got registered in my name. presently i am availing the HRA Benefits. can this be a problem for me in the future . please sugggest.
01 August 2024
Here's a detailed breakdown of your queries regarding interest and principal deductions on a housing loan, and considerations for HRA benefits:
### **1. Housing Loan Interest Deduction**
- **Eligibility for Deduction:**
- **Under Section 24(b):** You can claim a deduction of up to ₹2 lakhs per annum on the interest paid on a home loan for a self-occupied property. This deduction is available only for the property in which you reside.
- **Condition:** To claim this deduction, you must be the owner of the property. If the house is in your father’s name, you cannot claim the interest deduction unless you are a co-owner.
- **If the House is in Your Name:**
- If you have the house registered in your name, you can claim the deduction of up to ₹2 lakhs per annum under Section 24(b) for the interest paid on the home loan, provided the property is self-occupied.
- The deduction is limited to ₹2 lakhs per annum even if the actual interest paid is higher.
### **2. Principal Repayment Deduction**
- **Under Section 80C:**
- You can claim a deduction on the principal repayment of the home loan under Section 80C. The maximum limit for this deduction is ₹1.5 lakhs per annum.
- **Condition:** The property must be in your name to claim this deduction. If the property is in your father's name, you cannot claim this benefit.
### **3. Property Registration and Loan Application**
- **Property Ownership:**
- If you wish to claim the deductions for interest and principal repayments, the property needs to be registered in your name.
- **Loan Application:** Most banks will require the property to be in the name of the loan applicant to disburse the loan. If the property is in your father’s name, he would need to apply for the loan or you both might have to be co-borrowers if you are co-owners.
### **4. HRA and Property Ownership**
- **HRA Benefits:**
- If you are currently claiming HRA benefits, owning a property and claiming deductions under Section 24(b) and Section 80C can affect your HRA claim.
- **Implications:** If you own a house and are not staying in it (or if it’s not self-occupied), you may need to declare it as a self-occupied property, which might affect your HRA claim. Generally, if you are living in a rented property, you can continue to claim HRA, but you must be able to justify the rent payments and have proper documentation.
### **Summary:**
1. **Interest Deduction:** Up to ₹2 lakhs per annum if the property is in your name and is self-occupied.
2. **Principal Repayment:** Deduction up to ₹1.5 lakhs per annum under Section 80C if the property is in your name.
3. **Property Registration:** For claiming tax benefits, the property should be registered in your name.
4. **HRA Impact:** Owning a house can affect HRA claims, especially if the house is not rented out or is not a self-occupied property.
### **Recommendations:**
- **Consult a Tax Professional:** Given the complexities involved, especially with HRA benefits and ownership issues, it is advisable to consult a tax professional to navigate these aspects effectively.
- **Property Registration:** If feasible, register the property in your name if you want to avail of tax benefits related to housing loans.
This should guide you through the process of managing your housing loan and associated tax benefits effectively.
### **1. Housing Loan Interest Deduction**
- **Eligibility for Deduction:**
- **Under Section 24(b):** You can claim a deduction of up to ₹2 lakhs per annum on the interest paid on a home loan for a self-occupied property. This deduction is available only for the property in which you reside.
- **Condition:** To claim this deduction, you must be the owner of the property. If the house is in your father’s name, you cannot claim the interest deduction unless you are a co-owner.
- **If the House is in Your Name:**
- If you have the house registered in your name, you can claim the deduction of up to ₹2 lakhs per annum under Section 24(b) for the interest paid on the home loan, provided the property is self-occupied.
- The deduction is limited to ₹2 lakhs per annum even if the actual interest paid is higher.
### **2. Principal Repayment Deduction**
- **Under Section 80C:**
- You can claim a deduction on the principal repayment of the home loan under Section 80C. The maximum limit for this deduction is ₹1.5 lakhs per annum.
- **Condition:** The property must be in your name to claim this deduction. If the property is in your father's name, you cannot claim this benefit.
### **3. Property Registration and Loan Application**
- **Property Ownership:**
- If you wish to claim the deductions for interest and principal repayments, the property needs to be registered in your name.
- **Loan Application:** Most banks will require the property to be in the name of the loan applicant to disburse the loan. If the property is in your father’s name, he would need to apply for the loan or you both might have to be co-borrowers if you are co-owners.
### **4. HRA and Property Ownership**
- **HRA Benefits:**
- If you are currently claiming HRA benefits, owning a property and claiming deductions under Section 24(b) and Section 80C can affect your HRA claim.
- **Implications:** If you own a house and are not staying in it (or if it’s not self-occupied), you may need to declare it as a self-occupied property, which might affect your HRA claim. Generally, if you are living in a rented property, you can continue to claim HRA, but you must be able to justify the rent payments and have proper documentation.
### **Summary:**
1. **Interest Deduction:** Up to ₹2 lakhs per annum if the property is in your name and is self-occupied.
2. **Principal Repayment:** Deduction up to ₹1.5 lakhs per annum under Section 80C if the property is in your name.
3. **Property Registration:** For claiming tax benefits, the property should be registered in your name.
4. **HRA Impact:** Owning a house can affect HRA claims, especially if the house is not rented out or is not a self-occupied property.
### **Recommendations:**
- **Consult a Tax Professional:** Given the complexities involved, especially with HRA benefits and ownership issues, it is advisable to consult a tax professional to navigate these aspects effectively.
- **Property Registration:** If feasible, register the property in your name if you want to avail of tax benefits related to housing loans.
This should guide you through the process of managing your housing loan and associated tax benefits effectively.
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