Interest On Housing Loan Deduction Under Section 24

The home loan must be for purchase and construction of a property.

Interest on housing loan deduction under section 24. Maximum deduction allowed under this section is rs 1 50 000. A tax payer has been given the option of moving to this new regime for fiscal 2020 21 or continuing with the existing income tax structure. If you are receiving income from the house property then the amount that you are paying as interest on your home loan will be reduced from this income.

Budget 2020 has proposed a new tax regime with lower tax slab rates along with removal of almost all deductions exemptions. In respect of self occupied house property interest deduction u s 24 b is restricted to rs 2 00 000. Under the provisions of the section home buyers can save an additional rs 1 50 lakhs per year towards the interest paid on home loans over and above the rs 2 lakhs that they already save under section 24 b.

Interest deduction treatment is different depending upon whether the house property is self occupied or it is let out. Interest paid on housing loan taken for a rented out property can be claimed as deduction under section 24 b even in the new proposed tax regime. Interest paid on housing loan is allowed as a deduction to the extent of rs 2 lakhs in respect of self occupied property.

Interest on home loan the interest that you pay on your home loan is allowed as a deduction under section 24 of the income tax act. The self occupied property allows the deduction with the maximum limit of rs. Such deduction is allowed on accrual basis not on paid basis.

Such loan should be taken for purchase or construction or repair or reconstruction of house property. In case the property for which the housing loan has been taken is rented no maximum limit has been set and thus the taxpayer can avail deduction on the complete amount of interest under section 24. Section 24b of income tax act allows deduction of interest on home loan from the taxable income.

The loan must be taken on or after 1 april 1999. Your deduction on interest is limited to rs 30 000 if you fail to meet any of the conditions given below for the rs 2 lakh rebate i. Under section 24 of the income tax act one can avail the deduction on home loan for payment of interest tax benefit.