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- If you sell your property before five years, the entire deduction claimed under Section 80C towards the principal repayment is reversed and is added to your income in the year in which you sell the property.
- However, the deductions claimed against the interest portion are not reversed.
- If you have taken a credit protection insurance to take care of loan repayments in case of any unforeseen incident, you can claim deduction against the premium paid under Section 80C.
- In this year's Budget, Finance Minister Arun Jaitley announced an additional deduction of Rs 50,000 towards interest payment for first time home buyers. The additional deduction is available for home loans of up to Rs 35 lakh, provided the property value does not exceed Rs 50 lakh.
- You can't claim the principal repayment made during the pre-construction period. You can only claim the interest portion for the pre-construction period, only after the completion of the construction of the property. You can claim it in five equal instalments from the year in which the construction of the property is complete. However, the interest deduction (for both pre-construction and post-construction periods) claimed during the year can't exceed Rs 2 lakh in a year.
- If the construction of the property is not completed within five years from date on which the loan was taken, then the interest benefit of Rs 2 lakh reduces to just Rs 30,000. Till this Budget year, the tenure limit for the completion of the construction was three years; the finance minister raised it to five years, to provide some relief to the home buyers as property delays are widespread these years.
- If you have delayed payment against your home loan EMI, you can still claim the deduction as the tax rule allows a person to claim deduction on an accrual basis. However, if your lender charges you a penal interest for late payment, you can't claim it as deduction.
- You can also claim deduction under Section 80C for the stamp duty and registration charges paid. However, they can only be claimed in the year in which they are paid.
- In case of a second house, the entire payment towards interest can be claimed as deduction.
- In case of a joint home loan, each of the co-borrowers can separately claim deduction against the principal and interest repayment made in the proportion in which they are sharing the EMI, subject to the maximum limit. Suppose, you have availed a home loan with your wife as a co-borrower and are sharing the EMI in the ratio of 50:50, both of you can claim up to Rs 3 lakh (Rs 1.5 lakh each) for principal repayment and Rs 4 lakh (Rs 2 lakh each) for interest repayment.
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