Home loan repayment is eligible for tax deductions under the Income Tax Act 1961. Home loan interest paid up to Rs. 2 lakh per year is tax deductible u/s 24. Section 80C allows deduction against principal repayment of up to Rs.

Rs 2 lakh
Deduction for Interest Paid on Housing Loan The interest portion of the EMI paid for the year can be claimed as a deduction from your total income up to a maximum of Rs 2 lakh under Section 24. From Assessment Year 2018-19 onwards, the maximum deduction for interest paid on Self Occupied house property is Rs 2 Lakh.

Section 24 of the Indian Income Tax Act, 1961 takes into consideration the amount of interest an individual pay for home loans. This is also known as “Deductions from income from house property.” Basically, it allows you to claim tax exemptions on the interest amount of your home loan.

A top-up home loan is eligible for tax benefits under Section 80C and Section 24 if it has been utilised for acquisition/ construction of residential property or renovation of the said property. You can split the EMI and take income tax exemption under Section 80C and Section 24, individually.

Tax deductions on under-construction property In that case, you can claim the principal amount (up to Rs. 1.5 lakhs) as a tax deduction under section 80C of the ITA.

HRA calculation is done as per the employee’s salary. Actual rent paid minus 10% of salary. 50% of basic salary for those residing in metro cities and 40% for those living in non-metro cities.

The act allows exemptions up to ₹ 2 Lakh for self-occupied rented property, and for home construction loans, the exemption on interest can be earned in five instalments after the construction is completed.

An employee’s contribution to the Employee Provident Fund (EPF) account also earns a tax break under Section 80C of up to Rs 1.5 lakh. This amounts to 12% of salary that is deducted by an employer and deposited in the EPF or other recognised provident funds.