Question : How is the tax waiver counts on home loan is calculated?
Hi, My question is regarding home loans. My Dad is a Railway Officer. Drawing around RS. 5 lacs per year. He has a house building loan from SBI amounting Rs. 6 lacs. So please tell me that how his home loan will reduce the tax.
- asked by Arya Biswas
All Answers:
Answer #1
Repayment of Home loan (Principal) is waived underSec 80C. Keep in mind, that max waiver in 80C is1L (It includes PF, PPF, NSC, Insurance Premium,Children Education, Housing loan Principal amount,Infrastructure bond etc
- answered by ashok
Answer #2
•The interest payable on a home loan is notdirectly deductible from salary income. •Whatactually happens is that a calculation of Incomefrom House Property is made for each propertyowned. If such a calculation results in a loss, itis allowed to be set off against income from otherheads. •The limit of Rs 1,50,000, on interestpaid, is applicable u/s 24(b) while calculatingthe income from one self occupied property.•Theprincipal paid on the loan will be eligible fordeduction under Section 80C, subject to theoverall cap of Rs 1,00,000. HMT
- answered by HMT
Answer #3
There is maximum waiver of rs1.5 lakhs on interestper annum and rs1 lakh towards repayment ofinstalment Please refer yesterdays 6.9.09 BusinessLine, similar Q is answered
- answered by smahadevan39
Answer #4
For home loan interest deduction under section24(b) and capital deduction under 80C, read
http://mytaxes.in/index.php?topic=739.0.
- answered by Jss
Answer #5
Home Loan Deduction ExplainedYour home loan(borrowed capital) payment consists of two parts--payment of principal (home equity) and payment ofinterest on the loan. The interst portion isdeductible (under section 24(b)) up to Rs. 1.5lacs in a tax year for acquiring or constructing aproperty. The deduction is available only when theconstruction is complete or you have procession ofthe property.If the capital is borrowed forreconstruction, repairs or renewals of a houseproperty, then the maximum deductible amount ofinterest is Rs. 30,000 (instead of Rs.1,50,000).Pre-construction period. Interest ofpre-construction period is deductible in fiveequal installments. The first installment isdeductible in the year in which construction ofproperty is completed or property acquired.Deduction for Principal Paid. The principal may bedeductible under section 80C, which has a limit ofRs. 1 lacs. If you do not have any othersavings/investments allowable under 80C, then youcan deduct Rs. 1 lac of principal payment amount.If you already have some investments/savings under80C (say Rs. 60,000), then you can deduct only Rs.40,000 of the principal payment.The main points ofsection 24(b) Interest on Borrowed Capital are:a.The deduction is available on accrual basis andnot on actual payment basis, which means thatdeduction is available on yearly basis even if theinterest is not actually paid during the year. b.Interest on unpaid interest or on delayed paymentis not deductible. c. The brokerage or commissionon arranging the loan is not deductible.d. Thededuction is available only when the constructionon the property is completed or house property isacquired. That is deduction can not be takenduring pre-construction period.Chargeability(section 22)The owner of a house property(consisting of any building or land appurtenantthereto) is taxed on the income in the form of itsannual value under the head "Income from houseproperty". The legal owner of a house property isthe one who is chargable to tax in respect toproperty income. "Who is owner?" is defined bysection 27.Taking deduction on ITR form.If youclaiming home loan interest deduction, then youcan not use ITR-1. Home loan interest is claimedas deduction on Income from House Property so youneed to file ITR-2. On ITR-2, you must completeschedule HP, Income From House Property.
- answered by lqianke
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