1: Section 80C: Tax benefit on Principal amount on Home Loan The maximum tax deduction allowed under Section 80C is Rs.1,50,000.

This tax deduction under Section 80C is available on payment basis irrespective of the year for which the payment has been made. The Amount paid as Stamp Duty & Registration Fee is also allowed as tax deduction under Section 80C even if the Assessee has not taken Loan. However, tax benefit of home loan under this section for repayment of principal part of the home loan is allowed only after the construction is complete and the completion certificate has been awarded.

2. Section 24: Income Tax Benefit on Interest on Home Loan The maximum tax deduction allowed under Section 24 of a self occupied property is subject to a maximum limit of Rs. 2 Lakhs.

• Moreover, if the property is not acquired/constructed completed within 3 years from the end of financial year in which the loan was taken, the interest benefit in this case would be reduced from 2 Lakhs to Rs 30,000 only. This limit  has been increased to 5 years from Financial Year 2016-17.

• In case the property for which the Home Loan has been taken is not self-occupied, no maximum limit has been prescribed in this case and the taxpayer can take tax deduction of the whole interest amount under Section 24.

• It is also important to note that this tax deduction of Interest on Home Loan under Section 24 is deductible on payable basis, i.e. on accrual basis. Hence, deduction should be claimed on yearly basis even if no payment has been made during the year as compared to Section 80C which allows for deduction only on payment basis.

            4.Home loan in Joint Names

Tax benefits get divided among co-applicants in case of a joint loan. The division takes place in the same proportion in which the asset is owned by each co-applicant. Each co-applicant can claim a maximum tax rebate of up to Rs. 1.50 lakh for principal repayment (Section 80C) and Rs. 2 lakh for interest payment (Section 24). The very first condition is the house property has to be bought by the individuals jointly, and this should be in their joint names. The share of each holder should be clearly mentioned.

 Income Tax Benefit on Interest on Home Loan (First Time Buyers)

Maximum tax deduction allowed is Rs. 50,000. This incentive would be over and above the tax deduction of Rs.2,00,000 under Section 24 and Rs.1,50,000 under Section 80C.

5. Conditions for availing deduction

• Purchaser should be first time buyer i.e. he has never purchased any house and now he is going to purchase a house.

• This deduction would be allowed only if the value of the property purchased is less than Rs.50 Lakhs and the value of loan taken is less than Rs.35 Lakhs.

• The benefit of this deduction would be available till the time the repayment of the loan continues.

• This Deduction would be available from Financial Year 2016-17 Onwards..