Limit of Rs. 2 Lakh incl of Pre Construction Interest on Home Loan?

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  1. SandeepG

    SandeepG New Member

    Hi Guys,

    I have couple of questions regarding home loan.

    1. I have a join home loan. I want to know how is the split of the amount eligible for Interest on Home Loan. Say the interest was 3 lacs. So can i claim 2 lacs for myself and 1 lac for joint owner. Or does it have to be 50/50 ?

    2. I understand that the interest paid during construction of the property can be claimed after receiving possession in 5 equal installments per year. Is this amount on top of the existing 2 lacs limit for the ongoing home loan? So if interest paid before possession is 5 lacs and my interest after possession is 3 lacs per year.
    Means can I claim 1 lac (5/5) + 2 lac (current year) = 3 lacs ?

    3. Is it really true that Non-Self Occupied property has no limit on Tax Interest Exception. So if I buy another property with home loan of 50 lacs and keep it empty. Means i get full exemption of the 5 lacs interest per year. I suspect there must be a catch here.

    Many Thanks.
  2. gaurav_kumar

    gaurav_kumar Well-Known Member

    1. The Joint Home Loan can be claimed as a deduction in the ratio of ownership of the property
    2. It is a part of the Rs. 2 Lakhs limit in case of self occupied property
    3. If it is not self occupied - then their is no maximum limit for claiming interest. However, you would be required to pay tax on the rent received from such property. If it is not given on rent, tax would be required to be paid on the Notional Rent that would have been received if the property was given on rent.
  3. SandeepG

    SandeepG New Member

    Thanks Gaurav.

    For #1. Where can i find the ratio defined? What would be the wordings. All i know is that my mother is joint owner and joint applicant in the loan application. Not sure what default ratio has bank put.
  4. gaurav_kumar

    gaurav_kumar Well-Known Member

    If the exact ratio has not been specified means that you both are equal owners
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