Want to claim Interest on home loan deduction? Here’s how.

Interest on home loan deduction

Getting Started – Let’s do a quick check on what you need and how you can go about claiming Interest on Home Loan Deduction.

  •  Have your ownership details ready – is the property held jointly, are there co-owners, what are their % shares
  • Find out the completion date of your property.
  • Ask your lender, the bank that gave you a loan, for a statement of interest and principal repayment during the FY 2013-14.
  • Details of Municipal Taxes paid during the FY 2013-14.

How is Income from House Property Calculated – When you file at ClearTax, we do all calculations for you ourselves, you only need to input values. Here’s how Income from House Property is calculated –

Income from House Property

Here are the Tax Benefits –

  •  If home loan is availed against under construction property, the tax benefit of the interest payment is available only when the construction is complete.
  • Any interest payment for the period before the completion of construction of the property is allowed as deduction in five equal annual installments starting from the year in which the construction of the property is completed. For example, if completion of your property happened in FY 2013-14, you can claim 1/5th of interest paid uptil 31st March 2013 and also claim total interest paid in FY 2013-14 – when you file your return for FY 2013-14.
  • When your house is Self Occupied – the total deduction available against interest is Rs 1,50,000 per financial year.
  • In case your property is Let Out or when you have more than one self occupied property and your property is considered Deemed to be Let Out – the entire Interest is allowed as a deduction.
  • If you have co-owners and they are also co-borrowers, all of you will be allowed deduction for the interest according to your share. While e-filing when you disclose these details with us, we will automatically calculate your share.
  • In case there is Principal Repayment by you during the year (check your loan installment details), you can claim this amount under section 80C. However, the total amount allowed to be claimed under section 80C is capped at Rs 1,00,000.
  • If you purchased your house in FY 2013-14, and this is your first house, also where value of this house is Rs 40lakhs or less and the loan amount is Rs 25lakhs or less, you can claim deduction under Section 80EE of Rs 1,00,000. Read here to know more about it – Section 80EE

Hope this will help you e-file with us smoothly, here are some guides that tell you how to file when you have a Self Occupied Property or when your Property is Let Out.

If you have any questions or if you need help, do write to us support@cleartax.in and we will be happy to assist you.




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