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Monday, July 27, 2015

Five things to know about tax benefits on home loan interest

1. The interest component in the EMI can be claimed as deduction from "income  from house and property" under Section 24 of the Income Tax Act.

2. The  maximum tax deduction allowed under Section 24 is Rs 2 lakh for self-occupied  property and if the property is not self-occupied, there is no maximum  limit.

3. The interest payments for the year shall result in a loss under  the head "income from house property" which can be adjusted in the same year  against other heads of income including salary.

4. If the property is not completed within  three years from when the loan was taken, then the interest benefit drops to rs  30,000.

5. The pre-construction interest can be claimed from the year  when the construction is complete in five equal instalments.

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