Section 24b of Income Tax Act
Under Section 24b allows deduction of interest on home loan from the taxable income. Such loan should be taken for purchase or construction or repair or reconstruction of house property.
Maximum limits of deduction are applicable assessee wise and not property wise. Therefore if a person owns two or more house property then the total deduction for that person remains the same.
- In Let Out Property/Deemed to be Let Out – Rs. 2 lakh.
- Self Occupied House (SOP) – Rs. 2 Lakh.
Deemed to be let out means, when you own more than two house property.
Interest on Home Loan Sections
| Sections | Eligible for tax deductions |
|---|---|
| 24b | Maximum Limit is Rs.2,00,000. |
| 80EE | Maximum Limit is Rs.50,000. |
| 80EEA | Maximum Limit is Rs.1,50,000. |
Deductions Under House Property ::
- Municipal tax : Municipal taxes are to be deducted from the Gross Annual value to derive the Net annual value of the house property. Deduction of municipal tax is allowed only in case of Let Out Property.
- Standard Deduction : Standard Deduction is 30% of the Net Annual Value. This 30% deduction is allowed even when your actual expenditure on the property is higher or lower.
- Deduction of Interest on Home Loan for the property : Homeowners can claim a deduction of up to Rs.2 lakh on their home loan interest if the owner or his family reside in the house property.
HRA under section 10(13A) and interest deduction can be availed simultaneously even if house property is in same city in which you resides on rented property.
It is applicable Old Regime on Self Occupied House(SOP).
It is applicable both Old and New Regimes on Let Out Property.