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Confusion in Section 24(B) and Section 192(2B)

22 December 2021

I am government employed tax payer and i am also availing Home loan but i am confused in FORM16 entry of Interest paid on home loan by me. In Form16, there is no option of Section 24(B) instead of that our CA do entry of Interest paid in Section 192(2B) section as picture given below:

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7. Add. Any other income reported by the employee under as per section 192(2B)

(a) Income (or admissible loss) from house property reported by employee offered for TDS -200000

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Please tell that what is exact difference and can we use any one of them ?

Note: Please do not consider section 80EE in my case bcoz i am second time house buyer

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Alok Kumar (AVP) (22 Points)
Replied 23 July 2023

I understand your confusion. Let me explain the difference between Section 24(B) and Section 192(2B) and clarify the entries in Form 16.

Section 24(B): Section 24(B) of the Income Tax Act allows individuals to claim a deduction on the interest paid on a home loan. The deduction is available on the interest paid for a self-occupied or let-out property. For a self-occupied property, the maximum deduction allowed is up to Rs. 2,00,000 per financial year. If the property is let out or deemed to be let out, there is no upper limit on the interest deduction.
Section 192(2B): Section 192(2B) refers to a provision in the Income Tax Act that allows an employer to consider certain tax-saving deductions and exemptions at the time of calculating TDS (Tax Deducted at Source) on the employee's salary. This section is used by the employer to adjust for various deductions that an employee is eligible for, which would reduce the employee's taxable income.

Now, coming to the entry in Form 16: In the provided entry, your CA has considered the interest paid on the home loan under Section 192(2B) instead of Section 24(B). This might be for the purpose of adjusting your taxable income and calculating the correct TDS on your salary.

The reason for doing this is that the deduction under Section 24(B) is usually claimed at the time of filing the income tax return and not directly considered by the employer while calculating TDS. So, to ensure that your TDS is calculated accurately, the CA may include the interest paid on the home loan under Section 192(2B).

Can you use any one of them? In reality, the entry in Form 16 doesn't impact your eligibility to claim the actual deduction under Section 24(B) while filing your income tax return. The deduction of up to Rs. 2,00,000 on the interest paid on a home loan can still be claimed by you when filing your taxes.

So, to sum it up, while the entry in Form 16 might be listed under Section 192(2B), it does not prevent you from claiming the deduction under Section 24(B) when you file your income tax return. The CA has likely used Section 192(2B) only for the purpose of accurate TDS calculation by your employer. When you file your taxes, you can claim the home loan interest deduction under Section 24(B) as applicable. If you have any doubts or concerns, it's always best to consult with your CA for personalized advice based on your specific financial situation.