SAVE TAX UP-TO RS 200000

SAVE TAX UP-TO RS 200000  OF INCOME TAX THROUGH LOAN 

(i)

Clause (b) of section 24 provides for deduction of interest payable on capital borrowed for acquisition, construction, repairs, renewal and reconstruction of property while computing income under the head “Income from house property”.

(ii)

 In case of capital borrowed for acquisition or construction of self-occupied property, or a property which cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him, the amount of deduction under section 24(b) is restricted to ` 1,50,000.

(iii)

Taking into account the need for affordable housing, a new section 80EE hasbeen inserted to provide an additional benefit for first-home buyers relating todeduction in respect of interest on loan taken for residential house property.

(iv) New section 80EE provides for deduction of interest payable on loan taken by an individual-assessee from any financial institution (i.e., bank or banking institution or housing finance company formed and registered in India) for the purpose of acquisition of a residential house property, while computing his total income.

(v)

The deduction under section 80EE shall not exceed `1 lakh and shall be allowed in computing the total income of the individual for the A.Y.2014-15 and in a case where the deduction for the previous year relevant to the said assessment year is less than ` 1 lakh, the balance amount shall be allowed in the A.Y.2015-16.

(vi)

The deduction shall be subject to the following conditions:-

The loan is sanctioned by the financial institution during the period 1.4.2013 ‐31.3.2014.

The loan sanctioned for acquisition of the residential house property ≤ ` 25 lakh.

The assessee does not own any residential house property on the date of sanction of the loan.

The value of the residential house property ≤ ` 40 lakh.

(vi)

Further, where a deduction under this section is allowed for any assessment year, in respect of interest on housing loan, deduction shall not be allowed in respect of such interest under any other provision of the Income-tax Act, 1961, for the same or any other assessment year.