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Home loan interest tax deduction

gagan (Technical Lead) (47 Points)

11 January 2014

Hi,

I have taken home loan from ICICI Bank on 1st Jan-14. My EMI deduction date is 10th of every month so first EMI is deducted 10th Jan, next 10th Feb and then 10th Mar. My first EMI contains principle and interest of 10 days and next two EMI would contain principle and interest of full month.

This way, I would be getting tax benifit for 2month and 10 days i.e. duration of 10th Mar-14 to 31st Mar-14 is not considered in this financial year tax benifit.

But from 1st Jan-14 to 31st Mar-14, it is complete 3 month. is there any way to get tax benifit for the complete 3 months than only 2month and 10 days.

Please let me know if more information is required.

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5 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 12 January 2014

If your EMI starts from 10th Jan, then you can avail deductions for 2 months 20 days upto 31st March. If your EMI date was 1st Jan, then you may get full 3 months deduction.

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AVTAR SINGH (Expert) (1873 Points)
Replied 12 January 2014

As per Section 24(b) no deduction of interest shall be made (in case of self occupied property) unless the assessee furnishes a certificate, from the person to whom any interest is payable on the capital borrowed, specifying the amount of interest payable by the assessee for the purpose of acquisition or construction of the property.

So only way to get tax benifit for the complete 3 months is to arrange a certificate from the Bank for the tax payable upto 31st March. The banks do charge interest in their books till 31st March therefore you may ask them to give you a certificate of interest charged from 1st Jan-14 to 31st Mar-14.

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Bala Pullaiah B (Salaried) (179 Points)
Replied 13 January 2014

Get the certificate from the bank and claim the interest as told by Mr Avtar Singh.

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A.Senthil Subramanian (Tax Consultant) (1658 Points)
Replied 13 January 2014

Gagan, When you prepare your IT Returns for this FY 2013-14, you may give the full details on Housing loan Interest and Principal amounts in the appropriate places. The retrun should be shown as REFUND OF TAX at the end. Then easily you may get Refund of Excess tax, from the IT Department.

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