Can I claim tax benefits if I plan on constructing the and selling it in a few years?
If you sell the property within 5 years of possession, any tax deductions already claimed will be reversed. However, the tax exemptions on interest paid will remain unchanged.
Who is eligible to claim tax deductions on home loans?
The owner of the property can claim tax benefits. If the spouse is a co-borrower, they can also file for tax deductions. In the case of a joint loan, both parties can claim for their share of the loan they pay.
The property I purchased with a home loan is still under construction. Can I claim tax benefits?
You cannot claim tax deductions till the construction is completed. Once it is completed, you can claim an aggregate of interest paid for the period prior to the year of taking possession. This can be claimed in five equal instalments from the year in which construction is completed.
Can I claim tax benefits on loans from friends?
You can claim for tax deduction under Section 24(b) only for the interest paid. The friend will have to provide you with a certificate and will be liable to pay tax on the interest earned from the loan.
Can I claim tax benefit on two home loans?
Generally, tax benefits can be availed only on the claimed as self-occupied. In case if you own two houses, only one of them can be claimed as self-occupied property. The other will be considered as a let-out property and will be taxed as per the tax slab applicable. The notional rent on your second will be added to your income.
Can my spouse claim income tax deduction if we buy a jointly?
Yes, you can claim separate deductions in your IT returns if your spouse is employed and has a different source of income. You can both claim deduction under Section 80C up to Rs.1.50 lakh from your total income. If the is jointly owned, each co-owner can claim deductions up to Rs.2 lakh on account of the interest on borrowed money.
Is the Home Loan principal part of Section 80C?
Yes, home loan principal is part of Section 80C of the Income Tax Act. Under this section, an individual is entitled to tax deductions on the amount paid as repayment of the principal component on the housing loan. An amount up to Rs.1.50 lakh can be claimed as tax deductions under Section 80C. However, the tax benefit on the repayment of the principal amount can be claimed only after the is constructed. The section does not allow deductions for the repayment of the principal part during the years the was being constructed.
Are there any other tax deductions I can claim with respect to interest payment on the home other than the interest under Section 24(b)?
You can also claim tax deductions in respect of the interest on the housing loan under Section 80EE of the Income Tax Act. Under this section, an individual is entitled to claim tax deductions up to a maximum amount of Rs.1.5 lakh during a financial year.
Can I claim tax benefit on the principal repaid on a housing loan?
Yes, you can avail tax benefits on the principal amount repaid on the home loan from total income under Section 80C.
What is maximum amount I can avail for deduction of interest paid on my housing loan?
Under Section 24 of the Income Tax Act, an individual can claim tax deduction of the interest payment on the housing loan up to a maximum amount of Rs.2,00,000.