Benefits of Housing Loan?



Friends need some help on Tax Exemption on housing loan.

Assuming I get 10 L as CTC, I already pay around 50,000 for Insurance and around 36,000 for Tax Exemption MF. I have recently taken a home in Bangalore at 29 L and the loan from the bank is 23 L. The house is planned to be surrendered by Nov 2011. But the bank SBI has already started taking EMI from this month APR 2011.

Can some one help me with the details above about the tax exemption I can get on buying a home.

Benefits of Housing Loan?
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7 Replies to “Benefits of Housing Loan?”

  1. 1. U will own a House!!!
    2. Appreciation over a period of time….
    3. Tax exemption on interest paid: interest paid will be deducted from income.
    4. Principal repayment gets exemption under sec 80c. max Rs100000



  2. You can have your own house, you can have the interest expenses rebate at you income tax and you can have an appreciation to your property.


  3. Since the house will be transferred to you by nov 2011, you can claim loss under house property head for the assessment year 2012-13 for the interest paid in the financial year 2011-12 and deduction u/s 80C for principal repayment along with existing Insurance payment and mutual fund investment.


  4. You can deduct the principal payment of your housing Loan subject to an overall limit of Rs.100,000 u/s 80C. Since you already have eligible investments worth Rs.86,000 in 80C investments, your tax benefit for loan principal payment will be limited to the balance rs.14,000.

    Again you can claim deduction for your interest payments on housing loan u/s 24 subject to the limit of Rs.150,000.

    However, for the current FY, you will be able to claim these deductions/exemptions for 5 months only (Nov’11-Mar’12) since neither the interest nor the principal payments are eligible for deduction/exemption until you get the possession of the property, irrespective of your re-payment schedule.

    One good news is that, since you are getting the possession in this FY itself, the pre-possession EMI interest can be claimed in 5 equal instalments after you get the possession of your home.
    This interest should be claimed along with the interest component of the EMI (post-possession) under section 24. The overall limit remains Rs. 1.5 Lakhs even in this case.







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