Deduction of Home loan interest under section 24

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  1. Anil Jacob

    Anil Jacob New Member

    I have read many article on interest on housing loan but I am not clear on the rule still. I have taken home loan in May 2013 and my EMI started from July 2013. The property was under construction and hence I did not claim any deduction under 24 nor 80C for the interest or principal. I will get my property registered in October and I will start occupieing it in Novemeber onwards after the interior work. Assume my EMI 35000 (20,000 interest and 15000 Interest), I will pay 420,000 in 2014 (240,000 Interest and 180,000 principal) and I paid 210,000 in 2013 (120,000 Interest and 90,000 Principal). How much is the deduction I will get.
    My Calculation in 2014
    Since I occupied the property in current year, 2014 is considered as year acquired and 2013 is considered as pre acquisition.
    Interest Paid in 2014 : 240,000
    Deduction under 24 : 200,000 (Max 2 Lacs)

    Principal Paid in 2014 : 180,000
    Deduction under section 80c : 150,000 (Max 1.5)

    The interest paid 120,000 in 2013 can be deducted in 5 year equally (24000 Per Year)

    Please let me know if I am calculating it correctly or I miss something in this
  2. rudrabose

    rudrabose Active Member

    Dear @Anil Jacob

    The computation done by you is 100% Correct.

    You have understood the all provisions correctly and have not missed out on anything.
  3. Anil Jacob

    Anil Jacob New Member

    Thanks Rudra

    One of my friend had some doubt if we need to prorate or make any modifications in the current year.

    Thank you!
  4. rudrabose

    rudrabose Active Member

    Deduction for 2014

    Section 80C

    Amount paid by you in 2014-15: Rs. 1,80,000

    The deduction for payment of principal would be limited to Rs. 1,50,000 only as that is the max deduction allowed under this section.

    Section 24
    Amount paid by you in 2014-15: Rs. 2,40,000
    Pre-Construction Interest allowed in 5 Installments : Rs. 24000 (Rs. 1,20,000/5)
    Total: 2,64,000

    The interest deduction would be limited to Rs. 2,00,000 only as that is the max deduction allowed under this section

    However, if it is not a self occupied property - there is no max limit for repayment of interest on home loan.
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