Tax benefit on house loan

A deduction of amount paid as repayment of principal amount on loan taken for the purpose of construction or purchase of residential accommodation is allowed

  • Deduction is allowed only to individuals and HUF
  • Maximum amount of deduction allowed is Rs 1,00,000(including deductions under other sections of 80C,80CCC&80CCD)
  • Assessee should be the owner of the house property
  • House must be completed by the end of the previous year in which the deduction is to claimed.
  • Deduction is allowed only after the completion of construction
  • Completion of construction means-
  1. completion certificate has been issued by appropriate authority,
  2. house property or part has been occupied by the assessee or any other person on behalf of assessee, or
  3. house property has been let-out
  • Amount paid as stamp duty and registration fee is also allowed as deduction even assessee has not taken any loan.
  • Loan is obtained from-any Bank, LIC, NHB, state/central government, entities registered with the object of providing house loaned…
  • Any amount paid for the purpose of addition, alteration or renovation of house property after the issue of completion certificate is not allowed as deduction
  • If the assessee transfers the property within 5 years from the year which the assessee obtains possession of the house property, the entire tax deduction claimed in previous years will be reversed(it will be deemed to be the income of the assessee and tax has to be paid on such income)

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