01 August 2009
Installments paid on housing loans are allowable as a deduction u/s 80C on par with other deductions allowed u/s 80C. Thus the maximum limit of deduction u/s 80C along with other deductions u/s 80C, 80CCC and 80CCD is Rs 1 lakh.
The installments may be towards the amount due under any self financing or other scheme of any development authority, housing board. The housing loan may be taken from the housing finance institutions, banks or even the employer, where such employer is a public company/public sector company/university/co-operative society.
The installments actually paid during the financial year only will be allowed as deduction unlike the interest on housing loans, which is allowed on due basis.
01 August 2009
Some important hints for tax planning
~ The house property shall be registered in the name of the person, who intends to claim deduction towards interest and installment.
~ In the case of working couples having substantial taxable incomes, it may be worthwhile to register the housing property in the joint names and take separate housing loans to claim deduction of interest and installments.
~ If possible, the EMIs may be planned in such a way that the payments towards principal part of the loan do not exceed the limits available u/s 80C.
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