Housing Loan Information

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How to Enter Housing Loan Information?

If you have a housing loan and wish to enter information on your income from house property, you can enter information here. You will be eligible to claim tax rebate on the interest component of your repayment during the year Apr-March by entering information under the "Home Loan" tab.

As soon as you click on the icon on top of the right extreme column in the table, you will see a row with blank fields appearing inside the table, where you can enter details of home loan interest that you have paid or will be paying for the year. Please click on the respective cells to update the required details.

Fields

Self Occupied: Please select the checkbox if the property is self occupied. Once you select the "Self Occupied" field in any row, the "Rent Received" and "Municipal Taxes Paid" fields will automatically get disabled.

Rent Received: Please enter the rent amount received (in Rs) for the accommodation. The amount can have a maximum of two decimal places.

For any property which is not self occupied, you have to enter a value (other than zero) in the "Rent Received" field

If you have more than one self occupied property, then as per the tax law, properties other than the one you declare as self-occupied, would be deemed to be rented and you should enter the "annual value" (as per the tax law) of such properties in the "Rent Received" field.
For any property which is not self occupied, you have to enter a value (other than zero) in the "Rent Received" field.

Municipal Taxes Paid: Please enter the municipal taxes rent amount paid (in Rs) for the property. The amount can have a maximum of two decimal places.

Home Loan Interest (before April 1, 1999): Please enter the total annual interest here if your home loan was taken before April 1, 1999. The amount can have a maximum of two decimal places.

Home Loan Interest (on or after April 1, 1999): Please enter the total annual interest here if your home loan was taken on or after April 1, 1999. The amount can have a maximum of two decimal places.

Interest on Housing loan – Self Occupied Property (Under Section 80EE): Exemption for Interest on housing loan for employees having an existing housing loan and self occupied by them, continues to restricted to a maximum of Rs. 2,00,000 (2 Lakhs). But for those employees who avail loan for the first time an additional exemption of up to Rs. 1,00,000 has been provided for the financial year 2013-2014. The maximum exemption shall be Rs 2,50,000 for such cases.

But the following conditions have to be satisfied to avail this additional exemption.

The employee should not have any house in his name either individually or jointly.
The loan should have been availed between April 1, 2013 and March 31, 2014.
The cost of the house/flat purchased should not exceed Rs. 40,00,000
The loan availed for purchase of the said flat/house should not exceed Rs.25,00,000.

If this additional interest exemption in the year 2013-2014 is less than Rs. 1,00,000, the balance amount of interest up to Rs 1, 00,000 can be carried forward to the next financial year.

You can create as many rows as you wish to enter details in the respective fields. If you wish to delete any of the rows, you could do so by clicking on the icon at the end of the row.

Please note that you can enter interest on your housing loan here. In order to enter the principal amount repaid on your housing loan, please visit the "Investment - 80C" tab under the "Investments" tab. Click here to know more.

NOTE:

The interest on a housing loan shall be considered for tax deduction only if the acquisition or construction of the property, for which the loan is taken, is completed within the end of the year for which the interest is to be considered for tax deduction.

In case of property acquired or constructed with a loan borrowed on or after April 01, 1999, the acquisition or construction of the house property should be completed within 3 years from the end of the financial year, in which the loan was borrowed, for the loan interest to be considered for tax deduction.

Irrespective of the total number of rows, you can designate only one row as a self occupied property.

If you enter values for both Home Loan Interest (before April 1, 1999) and Home Loan Interest (on or after April 1, 1999), those would be taken as interest amounts on two loans for the same house property.

How is Tax Exemption from Interest on Housing Loan Calculated?

The Indian income tax law specifies tax deductions related to income from house property under Section 24 (b), wherein tax benefits can be availed on home loans on both the principal and interest components of a home loan. Irrespective of whether you have occupied or rented the house for which you have the loan, you can avail tax exemption. In addition, if you own a house on which you have a housing loan but you choose to live in a rented accommodation, you can claim both HRA exemption and housing loan tax exemption.

If you have occupied the property and your loan was taken before April 1, 1999

A maximum of Rs 30,000 can be availed as interest exemption and reduced from your salary in order to calculate the taxable income. In case your interest payment is lesser than Rs 30,000 for the current year, the interest exemption will be restricted to the actual interest amount paid.

The principal amount for the loan should be claimed under Section 80C -- which allows a maximum exemption of Rs. 1,50,000 (1.5 Lakhs) -- along with investments such as life insurance.

If you have occupied the property and your loan was taken on or after April 1, 1999

A maximum of Rs. 2,00,000 (2 Lakhs) can be availed as interest exemption and reduced from your salary in order to calculate the taxable income. In case your interest payment is lesser than Rs. 2,00,000 (2 Lakhs) for the current year, the interest exemption will be restricted to the actual interest amount paid.

The principal amount for the loan should be claimed under Section 80C -- which allows a maximum exemption of Rs. 1,50,000 (1.5 Lakhs) -- along with investments such as life insurance.

If your property is rented out

If the property is rented out, then the annual value (income as rent) will be calculated for that property as per the following formula.

Income from house property = Rental Income (net of municipal taxes) - 30% of rental income - Interest payable on home loans.

The income from house property can be negative when the interest payable is more that rent received. If the income from house property is a positive number, it is added to your salary for arriving at taxable income. If the income from house property is a negative number, it is reduced from your salary for arriving at taxable income.

Note:

1. Rental income should be reduced by municipal taxes, if any, paid for the property.

2. 30% of the rental income which is applied as a standard deduction is calculated automatically by Tanqaa once you enter the rental income.

3. In case of rented out properties, there is no limit on the interest amount that will be considered for tax exemption.

The principal amount for the loan should be claimed under Section 80C -- which allows a maximum exemption of Rs. 1,50,000 (1.5 Lakhs) -- along with investments such as life insurance.

If you have multiple "self-occupied" properties

In case, you have two properties where you have occupied one and kept the other property vacant, then the vacant property is "deemed to have been let-out" as per the Indian tax law. On Tanqaa, you can only mark one property as a self-occupied property. When you enter details of the vacant property by creating a new row, please enter a notional rental income in the "Rent Received" field. The notional rental income is the amount you would have received as rental income had you let it out and should be arrived at in line with the guidelines of the Indian tax department. Please note that in case of "deemed to be let out" properties, there is no limit on interest on housing loan considered for the purpose of tax exemption calculation.

Some rules to remember:

If you fail to make house loan repayments during a year, you cannot claim tax benefits on the loan.
You cannot claim tax exemptions on loans taken by others.
Interest on home loans taken for repairs, renewals or reconstruction, also qualify for tax rebate.
If you have taken a housing loan jointly with your spouse, both of you can claim tax exemption on the same loan to the extent specified as each of your share in the loan.
You can claim housing loan tax benefits in a year only if the construction of the house is completed during the year. If the property for which you taken the loan is under construction, then you cannot claim exemption for loan principal repayment under Section 80C. You can claim tax benefits for interest payments during the construction period across 5 years after the construction period. For example, if you paid Rs 200,000 as loan interest amount during the construction period, then you can claim Rs 40,000 for each year across 5 years after construction is completed. Please note that this amount should be included while calculating the maximum interest which is allowed for tax exemption calculation in case of self-occupied properties.
You cannot claim tax exemption on loans taken for purchase of land.

Proof Submission for Housing Loan Declaration

The details of the required proof and guidelines are given below for your reference.

Housing Loan

Proof to be submitted

Guidelines

Income / Loss on Home Loan Property under Section 24 (b)

Provisional certificate from the Housing Finance Company / Bank clearly indicating the property address for which the loan has been taken.

Self-declaration by the employee in case he is availing both HRA / HSG Interest benefit without property being let out.

Current year's interest alone is eligible tax rebate.
The benefit of deduction is applicable only after occupancy of the house and Pre-EMI interest (EMI paid before occupation of the house) is deductible in 5 equal installments starting from the year when the construction is completed or property is acquired. The relevant proof and the calculations have to be attached.
In case of jointly availed property loan, the employee should declare only the amount paid by him/her in the declaration.
Even if the own premises is left vacant- the notional rental income has to be declared.