How to show EMI in ITR for Tax saving for home loan ?

POSTED BY ICKGeek ON April 21, 2014 2:14 pm COMMENTS (7)

Hi,

I am working in Bangalore and constructing house in other state. For this house construction I took loan of 30L . So far 21L have been given to me (final 9L is pending… expected to be released soon). I have started my EMI from day 1 (From Jan 2013). (EMI: 30K). I havent shown any of this EMI in ITR so far… what is the best option for me to avail tax benefit on this now?

Thanks

7 replies on this article “How to show EMI in ITR for Tax saving for home loan ?”

  1. ashalanshu says:

    Dear Shravan, in case of self constructed house, Buidling Use or occupancy certificate issued by local municipality is enough to prove that house is ready possession. 80C can be claimed for loan repayment even before the completion of construction but interest payment ‘ll be there only post completion.

    For FY 2014-2015, the interest limit is now 2L Rs. So it’ll be FY 2014-2015 interest + 20% of (FY 2013-2014 and 2012-2013) interest, subject to over all ceiling of 2L Rs. for self occupied house.

    In case of rented property, current FY’s full interest +20% from prev. FYs’ interest ‘ll be available for tax benefit but you w’d have to show rental income also from Oct 2014 till March 2015.

    Thanks

    Ashal

    1. ICKGeek says:

      Hi Ashal,

      Thanks a lot for the reply and answering to my questions. Really appreciate your help in clarifying the doubts that I had.

      Thanks

  2. ICKGeek says:

    Hi Ashal,

    Thanks a lot for the reply…

    Just for confirmation, I heard that to claim the benefit I need some certificate to say that house construction is completed. For Apartments, I think this is occupancy certificate typically given by builders. For individual house, what certificate will this be? Will this be certificate issued by municipality saying completion of house?

    As construction is not over, I can claim my principal under 80C. But for claiming interest I need house to be completed. Am I correct in understanding?

    Assuming construction gets over this year and say I get certificate from municipalty around Sep 2014, per my understanding I will be eligible to avail benefit of 1.5L on interest paid in FY 2014-15. And the interest that I paid for FY 2013-14 can also be claimed next year. But question is 1.5L limit… does it apply to both of these combinely? (20% of interest paid in 2013-14 + interest paid in 2014-15) OR is this 1.5L limit separate for each of this?

    Assuming if I show it as rented property, this limit will be waved off and I can claim whatever I pad without limit right?
    Ex: I paid 1.8L interest in previous years, combinely FY 2012-13 + 2013-14 and 1.5L in FY 2014-15. I can claim of benefit upto 20% of 1.8L + 1.5L => 36k + 1.5L => 1.86L. Am I right?

    Thanks
    Shravan

  3. ashalanshu says:

    Dear ICGKeek, for interest no benefit for last FY 2013-2014 as of now. You can claim the same once house is ready and it ‘ll be 20% each for 5Y within the over all limit of 1.5L Rs. if property ‘ll be self occupied. In case of rented property, no such limit.

    As you have started repaying home loan, section 80c benefit is available to you and you can claim it right now.

    Thanks

    Ashal

    1. ICKGeek says:

      Hi Ashal,

      Can you please provide answers to my below query? Sorry for pushing for so many questions. But I am struggling to get the answers here even after talking with some CA folks. Hence I am relying on the answers on this forum to understand the scenario completely.

      Thanks in advance…

      Thanks
      ICKGeek

  4. ashalanshu says:

    Dear ICGeek, are you asking to avail home loan principal repayment benefit under section 80C within the 1L Rs. limit or the interest payment on home loan related tax benefit for 1.5L Rs. limit for self occupied property?

    Thanks

    Ashal

    1. ICKGeek says:

      Hi Ashal,

      Thanks for replying… I am asking for both.

      Thanks
      Shravan

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