I am NRI (residing and working in USA) and have 2 let-out house properties in India and this rent is my only income in India for which i file my ITR in India as NRI . Many years back i bought these both Flats through NRI Home Loans from ICICI Bank and now these loans are almost paid off and very soon my monthly EMIs will end . I know that yearly interest paid on home loan is a good deduction from annual rental income . Please let me know about the below in regard with home loan interest deduction : (1) Are there only 3 deductions allowed from house rental income i.e., 30% expenses , Interest of home loan paid during year & Principal amount repaid during year ? What are the limits of these deductions allowed every year ? (2) Are there any options that i can apply for top-up home loan or home equity loan or home credit loan in India now so that i can continue home loan related deductions from my rental income in india ? (3) Is loan against house property considered home loan and can this interest be allowed as home loan interest deduction ? (4) Any options i can borrow home loan further now and continue with home loan interest deduction irrespective of for which purpose i am using the loan amount ?
- There are only two deductions from house property income i.e. 30% and interest on housing loan. Principal amount is Deduction from GTI which is 1.50 lacs.
- It should be used for either purchase or construction purpose otherwise no deduction is allowed.
- No, if not used for purchase or construction.
- No.
Yes there are only 3 deduction available with regard to house property income, however principal amount is allowed as deduction under section 80C and not exclusively from house property income. Maximum limit for interest is 2 lakh and principal is 1.5 lakh a year.
Regarding your 2and 3 query I would like to say that you can get loan for reconstruction or repair work but for that you will only get deduction of 30000 a year and no loan against home is not considered as home loan, home loan means loan taken to purchase or repair house.
Yes, You can get home loan and claim deduction but in home loan generally banks disburse the amount to builder itself.
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Thank you
Hi
1. Under House property head, you're allowed a standard deduction of 30%. Additionally, you get home loan interest deduction. The deduction for principal repayments is provided under section 80C which is capped at 150000.
2. The loan should be used solely for the purpose of purchase or construction of house property for deduction allowability.
3. No
4. No
Hi,
Hope you are doing well !!
1.To calculate the actual taxable income from house property, the following two deductions are allowed under section 24 of the Income Tax Act.
a) Standard Deduction which is 30% of the NAV, is allowed as a deduction towards repairs, rent collection, etc. irrespective of the actual expenditure incurred. This deduction is not allowed if the Gross Annual Value is nil.
b) Interest on home loan is allowed as a deduction under section 24.
The amount paid as repayment of principal amount of home loan taken for the construction or purchase of a new house property by an individual/HUF is allowed as tax deduction u/s 80C of the Income Tax Act.The maximum tax deduction allowed u/s 80C is Rs 1,50,000.
2. No,the home loan must be for purchase or construction of a new house property.
3. No,the home loan must be for purchase or construction of a new house property.
4. No.
Thanks & Regards,
Payal Chhajed
Thanks for the reply to all . Please clarify : (1) Like interest on home loan deduction is maximum Rs.2 lakh in a yr for self-occupied property and no limit for rented house , is the amount of principal repayment of maximum of Rs.1.5 lakh in a yr applicable for both like either house is self-occupied or let-out ? (2) Are all these deductions limits of interest and principal repayment applicable for each one house property separately if a person has 2 or more house properties on home loans separately ? (3) I understand that I can take home loan now for reconstruction or repair work of my 2 houses already on rent and it comes under home loan , but can you please clarify how will I get Rs.30,000 interest deduction ? Is Rs.30,000 deduction for each loan on 2 different houses and any deduction of principal repayment for such loan for home repair ? (4) Any idea which banks should I contact for such repair / reconstruction loan and should I apply under home loan section or some other loan section ?
Hi,
1. The deduction to claim principal repayment is available for up to Rs. 1,50,000 within the overall limit of Section 80C.
Maximum deduction for interest paid on Self Occupied house property is Rs 2 Lakh u/s 24b. For let out property, there is no upper limit for claiming interest.
30% on NAV is allowed as a standard deduction from the NAV under Section 24 of the Income Tax Act. No other expenses such as painting and repairs can be claimed as tax relief beyond the 30% cap under this section.
2. The home loan should be used for purchase and construction of a property.
3. No.
4. No.
1. The limit of 1.5 lac under section 80C is cumulative for all house properties.
2. For principal repayments, limit is per individual and not per house property.
3. The deduction of interest shall be provided in the same way as above- per house property.
4. Any bank.
Please note that for a rented property, there is no limit on interest deduction. However, maximum loss under the head house property that could be set off against other income shall be 2 lacs; remaining loss, if any, shall be carried forward.
Hi
1. 30% standard Deduction, Repayment of principal under 80C (1.5 lacs max cap), Interest deduction -2 lacs for self occupied and no limit for letout property.
2. Only Interest deduction available for top up loan subject to condition that top loan utilised for further construction or renovation work only.
3.No
4.No
Hope it helps
Hi
1.Yes
2.Its per individual limit.
3.Deduction shall be available as per the provosions of sec 24 under income tax act
4.Any Bank of your choice,Just walkin to branches for more details ,as it varies on bank policy.Generally its given under home loan only.
Hope it helps
1) For rented property, now limit is of Rs.2 lacs to be set off with other income. Remaining amount you can carried forward for setsoff next yyears.Within house property head there is no limit.
2) Interest deduction is for one property.
3) For repair, limit is Rs.30,000. For reconstruction, limit is 2,00,000.
4) Contact nationalised bank.
1. Yes, the amount of principal repayment of maximum of Rs.1.5 lakh in a yr applicable for both like either house is self-occupied or let-out.
2.Principal repayments-Individual wise
Interest repayments-Property wise.
3. Limit of Rs. 30,000/- for repair and should be given property wise.
4. Any nationalised bank.
Yes the deduction for principal repayment is under section 80C and it's maximum limit is 150000 for any type of house and it's total 150000 and not 150000 for each house.
Interest deduction is separately for each house but principal deduction is for both houses.
However in case your interest is more than your rent income then you can set off that deduction only upto 2 lakh against other income and this 2 lakh limit is for both house and not each type of house.
Yes you get 30000 deduction for repair for each house and you don't get any principal deduction as principal deduction is only for purchase or construction.
Hi,
1. Yes, it is available for both with maximum deduction of Rs. 1.5 lakh in a year.
2. Deduction of Rs 1.5 lakh in a year for principal repayment applicable for all properties cumulatively.
Deduction of Rs 2 lakh in a year for interest repayment applicable for each one house property separately.
3. Maximum Rs 30,000/- deduction for repair.
4. Any bank.