TAX DEDUCTION ON INTEREST MAKES HOME LOAN CHEAPER

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} Ashish Gupta outlines some of the conditions and provisionsthat make you eligible for a tax deduction on the home loan interest you pay Under the Income Tax Act, interest paid on a home loan isdeductible from your total income, provided the conditions specified arecomplied with. The deductions are available while computing your income underthe Head 'Income from House Property' .The deduction on interest paid is available even if the house is not rentedout, and is either vacant or self occupied. The loan can be for construction,acquisition, repair or reconstruction of property. The main condition is that you should acquire property onborrowed money, and the interest should be payable on the borrowed capital.Interest paid on a home loan isallowed as a deduction on accrual basis i.e. on due basis. It need not havebeen actually paid during the year. The deduction on home loan interest paid can be claimedsubject to an upper limit of Rs 1.5 lakhs in a financial year. The interest ona loan taken for repair or reconstruction also qualifies for this deduction. For the purpose of computing income or loss under the head'Income from House Property' for a self-occupied house, a deduction of Rs30,000 is allowed on interest on borrowed capital. However, a deduction onaccount of interest up to a maximum limit of Rs 1.5 lakhs is available if the loanhas been taken on or after 1.4.1999 to constructor acquiring a house , and the construction or acquisition of the house hasbeen completed within three years from the end of the financial year in whichthe amount was borrowed. There is no stipulation regarding the date of commencementof construction. Consequently, the construction of the house could havecommenced before 1.4.1999 but, as long as it is completed within three years,from the end of the financial year in which capital was borrowed the higherdeduction would be available on capital borrowed after 1.4.1999. The higher deduction is not allowed on interest on capitalborrowed for repair or renovation of an existing house. To claim the higherdeduction you should furnish a certificate from the bank to whom the interestis payable on the capital borrowed, specifying the amount of interest payableand the purpose for which loan was taken. It is to be noted that there is nostipulation regarding the construction or acquisition of the residential unit being entirelyfinanced by capital borrowed on or after 1.4.1999. The loan taken prior to1.4.1999 will carry a deduction of interest up to Rs 30,000 only. However, inany case the total amount of deduction of interest on borrowed capital will notexceed Rs 1.5 lakhs in a year. In case a property has been acquired or constructed withborrowed capital, the interest payable on the amount borrowed for the periodprior to the previous year in which the property was acquired or constructed isalso eligible for deduction. The interest is deductible in five equal installmentscommencing from the previous year in which the house has been acquired orconstructed. The first instalment is deductible in the year in which theconstruction of the property is completed or acquired. The balance fourinstalments are deductible in the four subsequent years. Courtesy:- TOI dt:- 13-02-2010 For more informationregarding 4 bhk apartment, apartment in gurgaon, bedroom apartments, buyproperty in india, commercial complex in india, commercial real estate,commercial space in gurgaon, dealers, flats for sale, indian real estateinvestment, investment options in real estate, luxurious flats, malls, officespace, office space in gurgaon, online real estate, penthouses gurgaon, plots,property consultants, property in gurgaon, property india, property investment,real estate company, real estate developer, real estate gurgaon, real estate inindia, real estate investment strategies, real estate market, real estate news,real estate portals, realtors, realty, residence, residential real estate, sellproperty, shop, villas, Residential Apartment Visit        www.zameen-zaidad.com                 www.propertycafeteria.com  

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