Optimizing Home Loan Tax Benefits: ITR Filing 2024 Guide

1. Tax Benefits on Home Loans under Sections 80C and 24B:

   • Section 80C deductions cover the principal repayment of a home loan. This deduction applies to various expenses, including stamp duty, registration charges, and the principal amount repaid. It’s essential to note that this deduction is available for self-occupied as well as let-out or deemed let-out properties.
   • Section 24B deductions encompass the interest paid on a home loan. Taxpayers can claim this deduction for both self-occupied and let-out properties. For self-occupied properties, the maximum deduction allowed is Rs 2 lakh per annum. However, there is no limit on the deduction for interest paid on home loans for let-out properties.

2. Claiming Deductions on Under-Construction Properties:

   • Under Section 80C, taxpayers can claim deductions on the principal repayment of a home loan for under-construction properties from the financial year in which the loan is availed. This deduction can be claimed in five equal instalments starting from the year of possession.
   • However, deductions on interest payments (Section 24B) for under-construction properties can only be claimed after the completion of construction and possession of the property. No deductions are allowed for interest paid during the construction period.

3. Pre-Completion Interest Payments:

   • Taxpayers can claim deductions on interest payments made during the construction phase of under-construction properties under Section 24B. These deductions are available in five equal instalments starting from the financial year of possession, up to a maximum of Rs 2 lakh per annum.
   • It’s important to keep proper records of interest payments made during the construction period to avail of these deductions accurately.

4. Importance of Possession Documents:

   • Possession documents, such as the occupancy or possession certificate issued by the builder or relevant authorities, are crucial for claiming deductions on the interest portion of the home loan under Section 24B.
   • These documents serve as evidence of the completion of the construction and the taxpayer’s entitlement to claim deductions on the interest payments made.

By understanding and adhering to these guidelines, taxpayers can maximize their tax benefits while ensuring compliance with the Income Tax Act when filing their returns in 2024.

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