1. Benefits under section 24(b) and 80C of Income
Tax Act against Housing Loan and Its Limit.
By
Shankar Bose
Inspector of Income-tax
MSTU, Puri

2. Benefits under section 24(b) and 80C of
Income Tax Act against Housing Loan
and Its Limit.
There are no changes proposed in respect of deduction
available towards principal repayment & interest
payment u/s 24(b) or U/s 80C of the Income Tax Act-
1961. For the mass benefit the principal amount of
House Loan Repayment & interest thereon as under:
Interest payable on Home loan:
U/s 24(b) of the Income Tax Act-1961, deduction
up to Rs. 150,000/- is admissible against the
interest payable on the loan availed for purchase /
construction of the self occupied house
property.[However, the acquisition or construction
of the house property should be completed within 3
years from the end of financial year in which home
loan was taken; otherwise, the deduction would be
restricted to Rs. 30,000/-]
In respect of loan taken prior to 01.04.1999, the
deduction can’t exceed Rs. 30,000/-.

3. Pre-construction period Interest [Loan taken
against/for under construction property]: The
interest paid during the period the house property
is under construction is not deductible in the year
of payment. Interest in respect of pre-construction
period is deductible in five equal annual
installments commencing from the previous year
in which the house is constructed/acquired. For
this purpose “pre-construction period” means the
period commencing on the date of borrowing and
ending on March 31 immediately prior to the date
of completion of construction /acquisition.
In respect of self occupied house property, it may
be noted that for purchase / construction, interest
deduction is admissible up to Rs. 1.50 Lacs
whereas there is a ceiling of Rs. 30,000/- only in
respect of loan taken for Repairs/ Renewal or
Reconstruction.
Principal repayment of the home loan:
In respect of principal repayment of home loan,
deduction is admissible u/s80C. Overall deduction U/s
80C (which also includes deduction towards LIC/ PPF,
Tuition fees etc) can’t exceed Rs. 1 Lacs
Thanks