How to E-File ITR 1 (SAHAJ) with House Property Loan?

Taxpayers with home loan can claim a deduction for the interest repayment while filing ITR. ITR-1 is applicable for taxpayers with total income within Rs. 50 lakh, income from one house property and no capital gains income. 

Who Cannot Use ITR 1 Form?

• Total income exceeding Rs.50 lakh
• Agricultural income exceeding Rs 5000
• If you have taxable capital gains
• If you have income from business or profession
• If you have income from more than one house property
• If you are a director in a company
• If you have had investments in unlisted equity shares at any time during the financial year
• Owning assets (including financial interest in any entity) outside India if you are a resident, including signing authority in any account located outside India
• If you are a resident not ordinarily resident (RNOR) and non-resident
• Having foreign assets or foreign income
• If you are assessable in respect of income of another person in respect of which tax is deducted in the hands of the other person.

Tax Benefits on ITR Filing for Home Loan Repayment

Taxpayers with home loan repayment can claim a deduction for principal repayment under Section 80C and interest repayment up to Rs. 2 lakh against self-occupied property under the old tax regime only. 

However, an entire interest repayment deduction against income from let-out property is allowed under both old and new tax regime without any limit. 

Required Documents for Claiming Housing Loan Interest Deduction

• Property Ownership Details: You must own the property to claim the deduction. If you are a co-owner, determine your share, as the deduction amount depends on your ownership percentage.
• Completion of Construction or Purchase Date – The deduction on housing loan interest can be claimed starting from the year in which the construction of the property is completed. If you have incurred interest during the pre-construction period, you can also claim it. Pre-construction interest can be availed by dividing it into five equal installments, commencing from either the year of the purchase or the year when construction is completed.
• Borrower Details: The housing loan should be in your name to qualify for the deduction. Alternatively, you can be a co-borrower on the loan.
• Bank Certificate: Obtain a certificate from the bank that provides the details of the interest and principal amounts paid.
• Municipal Taxes Paid: Keep in mind that municipal taxes can be deducted from house property income only if they have been paid within the same year.

Step by Step Guide to Filing ITR 1 

Step 1: Start by entering your permanent information like Name, Date of Birth and PAN number

Step 2:  Click on Income Sources and input your income details from Salaries, you can choose to upload your Form 16, so we can populate your information directly (OR) you can enter your taxable salary and details of your employer manually.

Step 3: Locate your Taxable income in your Form 16.

Step 4: Enter the Salary TDS amount and details of the employer — If you changed jobs during the year, add another salary

Step 5: Next, enter your other incomes like Interest from Bank Accounts, Fixed Deposits, Gifts and others.

Step 6: Next, declare the exempt incomes, if any, like Mutual Funds, ULIP’s, interest from PPF account and agriculture income.

Step 7: If you have a housing loan on a self-occupied House Property, declare interest on the loan, enter the address of the house and specify co-owners, if any.

Step 8: Enter the total of your Section 80C deductions (LIC, Mutual Funds, etc). Declare all other deductions which are applicable. Check out the “More Deductions” tab. Don’t miss a deduction.

Step 9: ClearTax can automatically import your TDS entries from Income Tax Department. If you deposited tax via Challan 280 (self assessment tax) yourself, add details regarding it.

Step 10: Woohoo, ITS DONE! You can review for return by downloading ITR PDF or ClearTax word-report. Click on the large green button and your return shall be submitted to Income Tax Department.