Tax Benefit on Interest Payment on Home Loan

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  1. Karunesh Gupta

    Karunesh Gupta New Member

    Hi,

    I had bought a property in NOIDA in May 2011. The cost of property is approx. 45 Lakhs excluding stamp duty & Registration charges. I had taken loan from Axis Bank for the same during 2011 which continued till 2014. Post which I changed to HDFC Home Loans for an amount of < 20 Lakhs and have been paying the EMI till date. The property is ready and will be handed over by builder in June 2016. The EMI will still continue.

    Kindly let me know if I can claim any TAX benefit on EMI Interest & Principal components in the year 2016-17 and also in coming years as I am a salaried professional.
     
  2. Chandrashekar M

    Chandrashekar M Active Member

    Assuming that the builder will hand over the property in june 2016.

    1. From 1.4.2016 to 30.6.2016 - You can claim 1/5 of the interest component for 3 months against your salary income. Balance interest has to be claimed for the next 4 years at 1/5 of the same amount.

    2. Since the Builder has handed over the property to you, you can claim interest upto 2 lakhs from 1.7.2016 to 31.3.2017.

    3. You can claim the principle repayment of loan under section 80C along with your other savings.

    Regards
    Chandrashekar
    http://incometaxdoubts.wordpress.com
     
    Karunesh Gupta likes this.
  3. Karunesh Gupta

    Karunesh Gupta New Member

    Thanks a lot Chandrashekar! It clarified some %age of my doubt on what i can claim as benefit. Just to further add to it.
    1. Suppose I pay 15kx3=45k as interest component for April to June 2016. I will be able to claim only 45/5=9k in this year and similar amount in the next 4 yrs.
    2. For the amount of interest I pay post my handover in June (15kx9=135k), can be fully used for tax benefit up to 2 lakhs capping?
    3. So during this year 2016-17 i can claim tax benefit of - 9k + 135K= 144K

    - I have not claimed any tax benefit for the interest paid in past 5 years, which i suppose i was not allowed to do as the property was still not handed over? Please correct me.
    - Will I be able to take any benefit of that interest which I have paid in last 5 years from now on as i am about to get the handover & registry done in this year.
     
  4. Chandrashekar M

    Chandrashekar M Active Member

    1. You are right
    2. Yes you can
    3. Yes you can.
    4. Filing of returns for earlier years are belated. In order to claim the set off of loss (9K) against your salary income, you are allowed this benefit, only against the regular income filed before the due dates.
    5. You can start claiming pre-EMI interest of 9K from this year onwards.

    Regards
    Chandrashekar
    http://incometaxdoubts.wordpress.com
     
    Last edited: Apr 13, 2016
    Karunesh Gupta likes this.
  5. Karunesh Gupta

    Karunesh Gupta New Member

    Thanks Chandrashekhar! Your responses were great and cleared all my doubts which were outstanding for couple of months. It would also help me save some tax when I do my Income Tax declaration in my company for this ongoing year.
     
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