Tax benefit on housing loan Interest and Principle

Tax benefit on housing loan Principle :-

1. Deduction available U/s 80C :

•  Under Sec. 80C of income tax Act, Maximum deduction allowed of Rs. 150,000/- in which Principle re-paid of housing loan included. 
• In other words, housing loan principle amount is the part of Sec. 80C like other deduction i.e. Life insurance, Investment in PPF, EPF, Sukanya samridhi account, tuition fees or etc.

Tax benefit on housing loan interest Sec. 24 :-

1. If House property self occupied by owner :-

• Assessee can claim deduction upto Rs. 200,000/- on interest on housing loan. if the owner or his family reside in the house property.
• Condition for claiming the deduction of Rs. 2 Lac.  

                               a. The home loan must be taken for purchase or construct a new property.

                               b. The loan must be taken after 1st April 1999.

                               c. The purchase or construction must be completed within 3 years from the end of the financial year in which loan was taken.

• If assessee fails to meet any of the above condition then deduction on interest limited to Rs. 30,000/-
• Deduction on home loan interest cannot be claimed when the house is under construction. It can be claimed only after the construction is finished. The period from borrowing money until construction of the house is completed is called pre-construction period. Interest paid during this time can be claimed as a tax deduction in five equal installments starting from the year in which the construction of the property is completed. 

2. If House property rented out :-

• Assessee can claim entire interest on the home loan allowed as deduction.

3. Deduction U/s 80EE :-

• Deduction of Rs. 50,000/- is available to individual assessee on housing loan interest, those are first time home buyers.
• For Complete information read "https://goo.gl/3Umzm1"