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There are four steps to claim interest on your home loan deduction. The limit on the amount you can claim as interest on your home loan deduction has been increased to Rs.2,00,000 from the financial year 2014-15. As we have seen here, this can bring significant tax savings. Let’s understand what are the steps you need to take to claim this deduction
Union Budget 2021 Outcome-
The deduction for interest on housing loans under section 80EEA is to be extended to loans taken up to 31st March 2022.
Union budget 2019 Outcome-
The taxpayers are allowed to declare the value of ‘two houses’ as self-occupied as against one house allowed previously.
In case of a self-occupied house property, the amount of the deduction is limited to Rs.2,00,000. However, for let-out house property, there is no limit on the amount of interest you can claim as a deduction. From FY 2017-18 onwards, the deduction for home loan interest on let-out property is also limited to the extent to which loss of such house property does not exceed Rs.2 lakhs.
Here are the steps to calculate your income from House Property.
Gross Value of the property (nil in case of Self Occupied Property and Rental Value if rented) Less: Municipal Taxes actually paid Less: Standard Deduction (30% of Net Annual Value= Gross Value less municipal taxes) Less: Deduction for interest on home loan = Income from House Property.
Do note that when you file your return with ClearTax, you DON’T have to do any of these calculations. You only need to enter your details and we will automatically calculate the amount which will be your Income from House Property.
In case there is Principal Repayment by you during the year (check your loan instalment details) – principal repayments are allowed to claim interest on home loan deduction under section 80 C. However, the total amount allowed to be claimed under section 80C is capped at Rs 1,50,000.
Interest paid on home loan is eligible for deduction of Rs.2 lakh if the house property is self occupied. In case of rented property, full amount of interest paid is allowed as deduction. Also section 80C allows to claim Rs.1.5 Lakh of principal amount of the home loan.
Tax deduction under section 80EEA is allowed for the first time home buyers for the amount of interest paid towards the home loan under affordable housing scheme. Deduction allowed is Rs.150,000 during a financial year over and above the deduction of section 24.
Yes, interest on home loan can be claimed under section 24 and 80EEA. Interest paid on home loan is eligible for deduction of Rs.2 lakh if the house property is self occupied. In the case of rented property, full amount of interest paid is allowed as deduction.
Principal amount is allowed as deduction under section 80C within the limit of Rs.1.5 lakh.