Home equity loan using for extension of my house (construction)

Hi,

Yes, you will get the following benefits:

Section 24 : purpose of loan : Purchase/ Construction/ Repair/ Renewal/ Reconstruction of a Residential House Property.

Deduction allowed is subject to a maximum limit of : self occupied - 200,000 let out - no limit i.e full amount of interest.

Section 80C : purpose of loan: construction or purchase of semi - constructed house and for its further construction. Deduction for repayment of principal - 150,000 subject to conditions.

Section 80EE: purpose of loan : purchase of residential house. deduction in addition to section 24 & 80C maximum deduction - 50,000 subject to conditions.

if the purpose is not as above mentioned. no deduction will be available.

- In case of self-occupied, maximum deduction of interest available is Rs.2 lacs every year.

- You need to amend the cost of the property in the registered sale deed for which stamp duty and registration charges will be paid, for which one time deduction upto Rs.1.50 lacs p.a. is available.

- Loan should be used for house construction and not for other purpose.

Thanks

Dear Sir,

Hope you are doing well !!

Yes, you have heard the correct.

1. You can claim up to Rs. 2,00,000 as interest deduction u/s 24.

2. You can claim up to Rs. 1,50,000 as principal repayment deduction u/s 80C.

However, the loan amount must be used for house construction only.

Thanks & Regards,

Payal Chhajed

1) You need to use the loan for the purpose for which it was sanctioned. I presume that the purpose was for extension of your existing house only. 

2) The interest paid till the completion and occupation of the extended house needs to be capitalised. The interest will be allowed as deduction in 5 annual equal installments from your income from house property.

3) As the house is self occupied, the interest on housing loan will be allowed to the extent of Rs. 2 Lakhs.

4) The principal repayment will be allowed as a deduction u/s 80C along with other expenses/investments upto Rs 1.5 Lakhs.

Hi

Interest deduction maximum to Rs 2 lacs under sec 24 will be available.Also principal repayment can be claimed under sec 80c subject to maximum limit of rs 1.5 lacs.

Since you are taking loan for extension of your house you can claim interest deduction of upto 2 lakh under section 24(b).

You can't get deduction for principal amount as you are just taking loan for extension.

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Thank you