repayment of house loan

sir if i pay home loan prepayment of RS 150000/- extra than EMI CAN I claim u/s 80c for that amount Rs 150000/-

 

Hi yes you can but were are some restrictions to avail this deduction mention as below:-

Deduction for house loan /installment available up to Rs 150000/- under section 80C (earlier limit was Rs.100000 /-)

The payment of loan should be made towards cost of purchase/construction of new residential house property.

The house property income should be assessable in the hand of assessee in simple term assessee should be the owner of the house property.

• The house property income should be assessable in the hand of assessee in simple term assessee should be the owner of the house property.

• The house loan should not be for addition or alteration to,or renovation or repair of house property

• House construction must be completed before the end of the previous year (read details here)Completion of house means
  1. completion certificate in respect of the house property by the authority competent to issue such certificate or
  2. house property or part has been occupied by the assessee or any other person on behalf of assessee or
  3. has been let out;

• Housing loan benefit for more than one house can also be claimed.

• All the benefit of tax u/s 80C will reversed if house property is sold with 5 year from purchase of house property

• The tax benefit under section 80C is available on residential house property only and not available on commercial house property.

• Loan should be taken from Specified institutions/deptt only as given below

1. Central or State Government
2. any Bank including co-operative bank
3. LIC or National Housing Bank
4. public company formed and registered in India or co-operative society with main object to provide long term finance for construction purchase of houses in India.
5. Assessee's Employer if public company or public sector company or university established by law or a college affiliated to such university or local authority or co-operative society.

• The benefit is available only to Individual assessee and to HUF assessee.

• The benefit is available on payment basis ,no matter to which year payment is relates to or payment overdue or not.

• From total amount of installment paid of house loan reduce amount availed under deduction section 24.(INTEREST)

• The Benefit under this section is available whether residential house property is rented or self occupied,but House must be completed by the end of the previous year in which deduction is to be claimed .

• Pre EMI paid in a financial year are also eligible for deduction if house property is completed by the end of financial year.

• Stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee is also eligible for deduction under this section even assessee has not taken any loan .

• There is no requirement that for loan ,house property must be mortgaged to the institution from where the loan has been taken ,but it should be used for the purpose of purchase /construction of house property.

 

i already taken house loan and occupied so please give opinion

 

The extra amount that is being charge is over and above the principal and hence can not be allowed u/s 80C, since u/s 80C deduction is allowed only for principal.


"interest" means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised ;

 

Only up to 1,50,000 .... U/s 80C

 

confusing ZED AND SOBAN SINGH please give opinion

 

Sir, the text from the bare Act is in front of you.
I wish to ask you as to

1.whether the prepayment charges are called "principal amount" of the loan?
Just because you choose to repay the loan earlie, the principal amount will not decrease,principal amount would remain the same . Well unless in your case the bank is actually decreasing the principal repaid by you.


2. If its not principal amount then deduction can not be claimed u/s 80C.

3. Now read the definition of interest I have cited for you and tell whether this amount is in respect of money borrowed or not.
If it is then definitely it is interest and hence provisions of S.24 are applicable.

 

i think it should be principal amount that i prerepay

 

the prepay is principal, but the PRE-PAYMENT CHARGES are not part of principal.
The bank will ask for pre payment charges because it will loose the interest income if you repay the principal earlier.
Kindly compare your Total payment and see how much was the principal amount of the loan and what will actually go out of your pocket.
The excess part ,by whatever name, is interest.

 

you should collect the repayment schedule from banker were you can see clearly the principle amount & interest amount which is paid by you already