{"id":86,"date":"2015-05-02T13:06:37","date_gmt":"2015-05-02T13:06:37","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=86"},"modified":"2026-08-23T23:19:14","modified_gmt":"2026-08-23T17:49:14","slug":"income-tax-savings-through-house-property","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/","title":{"rendered":"Income Tax Savings through House Property"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a93b22f7a3ab\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a93b22f7a3ab\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#INCOME_TAX_SAVINGS_THROUGH_HOUSE_PROPERTY\" title=\"INCOME TAX SAVINGS THROUGH HOUSE PROPERTY\">INCOME TAX SAVINGS THROUGH HOUSE PROPERTY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#Interest_Paid_towards_housing_loan\" title=\"Interest Paid towards housing loan:-\">Interest Paid towards housing loan:-<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#How_much_Interest_Deduction_allowed_Us_24b\" title=\"How much Interest Deduction allowed U\/s 24(b) :-\">How much Interest Deduction allowed U\/s 24(b) :-<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#In_case_of_self_occupied_house\" title=\"In case of self occupied house:-\">In case of self occupied house:-<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#In_case_of_Rental_Deemed_to_be_let_out_House_Property\" title=\"In case of Rental \/ Deemed to be let out House Property.\">In case of Rental \/ Deemed to be let out House Property.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#Principle_Amount_paid_towards_Housing_Loan\" title=\"Principle Amount paid towards Housing Loan:-\">Principle Amount paid towards Housing Loan:-<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#Stamp_Duty_and_Registration_Charges_for_a_home\" title=\"Stamp Duty and Registration Charges for a home:-\">Stamp Duty and Registration Charges for a home:-<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#Fresh_Home_Loan_for_Additional_Floor_Can_You_Claim_Interest_Deduction_Again_Under_Section_24b\" title=\"Fresh Home Loan for Additional Floor: Can You Claim Interest Deduction Again Under Section 24(b)?\">Fresh Home Loan for Additional Floor: Can You Claim Interest Deduction Again Under Section 24(b)?<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#Understanding_Section_24b\" title=\"Understanding Section 24(b)\">Understanding Section 24(b)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#Why_Additional_Floor_Construction_Qualifies\" title=\"Why Additional Floor Construction Qualifies\">Why Additional Floor Construction Qualifies<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#Conditions_for_Claiming_the_Deduction\" title=\"Conditions for Claiming the Deduction\">Conditions for Claiming the Deduction<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#1_Loan_Must_Be_Used_for_Construction\" title=\"1. Loan Must Be Used for Construction\">1. Loan Must Be Used for Construction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#2_Deduction_is_Linked_to_Completion_of_Construction\" title=\"2. Deduction is Linked to Completion of Construction\">2. Deduction is Linked to Completion of Construction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#Maximum_Deduction_Available_for_Self-Occupied_House\" title=\"Maximum Deduction Available for Self-Occupied House\">Maximum Deduction Available for Self-Occupied House<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#No_Separate_INR_2_Lakh_Limit_for_the_New_Loan\" title=\"No Separate INR 2 Lakh Limit for the New Loan\">No Separate INR 2 Lakh Limit for the New Loan<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#Illustration\" title=\"Illustration\">Illustration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#Deduction_Available\" title=\"Deduction Available\">Deduction Available<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#Treatment_of_Pre-Construction_Interest\" title=\"Treatment of Pre-Construction Interest\">Treatment of Pre-Construction Interest<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/carajput.com\/blog\/income-tax-savings-through-house-property\/#Impact_of_Tax_Regime\" title=\"Impact of Tax Regime\">Impact of Tax Regime<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-30490\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/11\/AI-.png\" alt=\"\" width=\"1007\" height=\"498\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/11\/AI-.png 1007w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/11\/AI--300x148.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/11\/AI--768x380.png 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/11\/AI--800x396.png 800w\" sizes=\"(max-width: 1007px) 100vw, 1007px\" \/><\/h2>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"INCOME_TAX_SAVINGS_THROUGH_HOUSE_PROPERTY\"><\/span><span style=\"color: #000080;\"><strong><span style=\"text-decoration: underline;\"><a style=\"color: #000080; text-decoration: underline;\" href=\"https:\/\/www.caindelhiindia.com\/blog\/implication-of-cash-transaction-under-income-tax-act\/\">INCOME TAX<\/a> SAVINGS THROUGH HOUSE PROPERTY<\/span><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\">Does your home,\u00a0 saveour income tax? Buying a house for self-occupation can be biggest tax saving instrument. \u00a0It saves your income tax in two ways. \u00a0\u00a0You can save maximum Rs 75750 per year on your home.<\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #ff6600;\"><strong>Introduction:<\/strong><\/span><\/p>\n<p style=\"text-align: justify;\">There are two main benefits which are available under Income Tax Act, 1961 in relation to Purchase or Construction of House Property which are described as under:<\/p>\n<ul style=\"text-align: justify;\">\n<li>Deduction of Interest on Capital borrowed for purchase or construction of House Property under Section 24 (b) of the<a href=\"https:\/\/carajput.com\/income-tax-services.php\"> Income Tax Act, 1961.<\/a> (Interest paid by house owner on housing loan)<\/li>\n<li>Principle amount paid towards Housing loan for purchase or construction of House Property under Section 80 C of the Income Tax Act, 1961.<\/li>\n<li>The amount stamp duty\/ Registration charges paid while acquiring a property will be allowed deduction U\/s 80C.<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Interest_Paid_towards_housing_loan\"><\/span><span style=\"color: #ff6600;\"><strong>Interest Paid towards housing loan:-<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\">The house property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount payable towards interest on borrowed capital is allowed as deduction under u\/s 24(b) of the Income-tax act.<\/p>\n<ul style=\"text-align: justify;\">\n<li>We have to note here Interest payable on borrowed capital is allowed (Interest paid is irreverent here).<\/li>\n<li>In case of under-construction property, Interest will aggregate from the date of borrowing till the end of the previous year prior to the previous year in which the house is completed and allowed in five successive financial years starting from the year in which the acquisition or construction was completed.<\/li>\n<li>In case Assesses is the owner of more than one residential property, he may exercise an option to treat any one of the houses to be self-occupied and the other houses will be deemed to be let out and the annual value of such house will be determined as per Section 23(1)(a) of the Income Tax Act, 1961.<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"How_much_Interest_Deduction_allowed_Us_24b\"><\/span><span style=\"color: #ff6600;\"><strong>How much Interest Deduction allowed U\/s 24(b) :-<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-24780\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/05\/Secion-24photo_2023-06-23_00-12-02.jpg\" alt=\"house property Deduction \" width=\"1080\" height=\"933\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/05\/Secion-24photo_2023-06-23_00-12-02.jpg 1080w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/05\/Secion-24photo_2023-06-23_00-12-02-300x259.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/05\/Secion-24photo_2023-06-23_00-12-02-1024x885.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/05\/Secion-24photo_2023-06-23_00-12-02-768x663.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/05\/Secion-24photo_2023-06-23_00-12-02-800x691.jpg 800w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"In_case_of_self_occupied_house\"><\/span><span style=\"color: #ff6600;\"><strong>In case of self occupied house:-<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">(a)\u00a0\u00a0 In case property is acquired or constructed with capital borrowed on or after 01-04-1999 and such acquisition or construction is completed within 3 years of the end of the financial year in which the capital was borrowed:<\/p>\n<p style=\"text-align: justify;\">Minimum of Actual Interest payable or Rs 1, 50,000\/- .<\/p>\n<p style=\"text-align: justify;\">(b)\u00a0\u00a0 In case property is acquired or constructed with capital borrowed<\/p>\n<p style=\"text-align: justify;\">Minimum of Actual Interest payable or Rs 30,000\/- .<\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"In_case_of_Rental_Deemed_to_be_let_out_House_Property\"><\/span><span style=\"color: #ff6600;\"><strong>In case of Rental \/ Deemed to be let out House Property.<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">Interest payable on barrowed capital for the previous year is allowed as deduction under U\/s 24(b).<\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Principle_Amount_paid_towards_Housing_Loan\"><\/span><span style=\"color: #000080;\"><strong>Principle Amount paid towards Housing Loan:-<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">Any payment made for purchase or construction of a residential house property which is chargeable to tax under the head \u201cIncome from House Property\u201d towards any installment or part payment due to any Bank, Financial Institution, Company or Co-Operative Society towards the cost of the house property allotted to him is allowed as deduction U\/s 80 C of the <a href=\"https:\/\/carajput.com\/income-tax-services.php\">Income Tax Act, 1961<\/a> to the extent of Rs. 1,00,000 along with other Specified Investments mentioned under Section 80 C of the Income Tax Act, 1961.<\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Stamp_Duty_and_Registration_Charges_for_a_home\"><\/span><span style=\"color: #000080;\"><strong>Stamp Duty and Registration Charges for a home:-<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">The amount you pay as stamp duty or registration fee\u00a0when you buy a house\u00a0 can be claimed as deduction under section 80C in the year of purchase of the house.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-27181\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/05\/Small-Saving.jpg\" alt=\"Small Saving hit in budget 2024\" width=\"864\" height=\"1511\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/05\/Small-Saving.jpg 732w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/05\/Small-Saving-172x300.jpg 172w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/05\/Small-Saving-586x1024.jpg 586w\" sizes=\"(max-width: 864px) 100vw, 864px\" \/><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Fresh_Home_Loan_for_Additional_Floor_Can_You_Claim_Interest_Deduction_Again_Under_Section_24b\"><\/span><span style=\"color: #000080;\">Fresh Home Loan for Additional Floor: Can You Claim Interest Deduction Again Under Section 24(b)?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"color: #000000;\">Many homeowners expand their existing homes as family needs grow. A common question that arises is whether a taxpayer can claim an additional deduction u\/s 24(b) of the Income-tax Act when a fresh loan is taken for constructing an extra floor on a self-occupied house. Let us understand the tax implications in detail. The Practical Scenario Consider the following situation:<\/span><\/p>\n<ul>\n<li>A taxpayer owns a self-occupied residential house.<\/li>\n<li>housing loan was originally taken for the construction of the house.<\/li>\n<li>construction was completed within the prescribed period.<\/li>\n<li>The taxpayer has been claiming an interest deduction under Section 24(b).<\/li>\n<li>After five years, the taxpayer decides to construct an additional floor on the same property.<\/li>\n<li>A fresh loan is obtained specifically for financing the construction of the new floor.<\/li>\n<\/ul>\n<p>Question: Can the taxpayer claim a deduction for interest on the fresh loan u\/s 24(b)?<\/p>\n<p>Answer: Yes. The taxpayer can claim a deduction for interest on the fresh loan taken for the construction of an additional floor, subject to fulfillment of prescribed conditions and the overall limits under Section 24(b).<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Understanding_Section_24b\"><\/span><span style=\"color: #000080;\">Understanding Section 24(b)<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Section 24(b) of the Income Tax Act allows deductions for interest payable on borrowed capital utilized for the purchase of a house property, construction of a house property, reconstruction of a house property, and repair, renewal, or improvement of a house property. Since construction of an additional floor amounts to further construction, reconstruction, or improvement of the existing residential property, the interest on a loan taken specifically for such construction qualifies for deduction u\/s 24(b).<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Why_Additional_Floor_Construction_Qualifies\"><\/span><span style=\"color: #000080;\">Why Additional Floor Construction Qualifies<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The law does not restrict the deduction only to the original construction of a house.\u00a0Where a taxpayer borrows funds for the extension of an existing house, the addition of new residential space, and the construction of another floor, the borrowing continues to be linked with the house property and therefore falls within the scope of Section 24(b).\u00a0Accordingly, a fresh loan taken for constructing an additional floor is eligible for interest deduction.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Conditions_for_Claiming_the_Deduction\"><\/span><span style=\"color: #000080;\">Conditions for Claiming the Deduction<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"1_Loan_Must_Be_Used_for_Construction\"><\/span><span style=\"color: #000080;\">1. Loan Must Be Used for Construction<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The taxpayer should be able to demonstrate that the borrowed funds were actually utilized for construction of the new floor.\u00a0The following documents should be preserved: Loan sanction letter, loan account statements, Construction agreements, contractor bills, material purchase invoices and Bank statements evidencing utilization of funds. Proper documentation becomes crucial in case of scrutiny by the Income Tax Department.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_Deduction_is_Linked_to_Completion_of_Construction\"><\/span><span style=\"color: #000080;\">2. Deduction is Linked to Completion of Construction<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Interest relating to the construction period is treated as pre-construction interest.\u00a0The deduction generally becomes available after completion of the construction of the new floor and subject to the provisions governing pre-construction interest.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Maximum_Deduction_Available_for_Self-Occupied_House\"><\/span><span style=\"color: #000080;\">Maximum Deduction Available for Self-Occupied House<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The most important aspect to understand is that the law provides a limit for self-occupied property.<\/p>\n<div class=\"___1dmoc29 f10pi13n ftgm304 f1enuhaj fdclmfp f1nbblvp fat0sn4 f1ov4xf1 fekwl8i f1lmfglv f1oz7aqm f1abmfm4 f1w619qj f16h0jq8\">\n<table class=\"___1vyiefv f1ddd56o f16vktn6 f1ahpp82 f11qra4b f1uinfot fibjyge fvueend f9yszdx f1fu4s3n f3l3pb3 f10ghnd0 f8fmt76 fjvbh62 f1qrqxae f1vw5qpk fc02sbz fxawf59 fymf513 f1aoyrul f1el8yx3 f1pymoxg f1ofu761 fe6itr f7coize f1794535 f1o0pw0q fbjjl9v fk1v6el f16pyhcb f1ixlhx9 f12zef0i flu5r5u f19haqzy f1owmcxx f1oddm8q f1004tna fcoaxci fh0ee9u f15v23i2 f1dmj53 f1r1gcv9 f14z1veh ffufd3x f1ypplot f1660cg\" style=\"height: 64px;\" width=\"829\">\n<tbody>\n<tr>\n<th>Particulars<\/th>\n<th>Amount<\/th>\n<\/tr>\n<tr>\n<td>Maximum deduction under Section 24(b) for self-occupied property<\/td>\n<td>INR 2,00,000 per year<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>This limit applies to the total interest payable on all eligible housing loans relating to the same self-occupied property.\u00a0Therefore, interest on the original housing loan and the new loan for additional floor construction must be aggregated while computing the deduction.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"No_Separate_INR_2_Lakh_Limit_for_the_New_Loan\"><\/span><span style=\"color: #000080;\">No Separate INR 2 Lakh Limit for the New Loan<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Many taxpayers assume that since a fresh housing loan has been taken, another deduction of INR 200,000 becomes available. This understanding is incorrect.\u00a0The law does not grant a separate ceiling for every housing loan.\u00a0Instead, the aggregate interest deduction for a self-occupied house remains restricted to INR 200,000 annually.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Illustration\"><\/span><span style=\"color: #000080;\">Illustration<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Suppose the following interest is payable during a financial year:<\/p>\n<div class=\"___1dmoc29 f10pi13n ftgm304 f1enuhaj fdclmfp f1nbblvp fat0sn4 f1ov4xf1 fekwl8i f1lmfglv f1oz7aqm f1abmfm4 f1w619qj f16h0jq8\">\n<table class=\"___1vyiefv f1ddd56o f16vktn6 f1ahpp82 f11qra4b f1uinfot fibjyge fvueend f9yszdx f1fu4s3n f3l3pb3 f10ghnd0 f8fmt76 fjvbh62 f1qrqxae f1vw5qpk fc02sbz fxawf59 fymf513 f1aoyrul f1el8yx3 f1pymoxg f1ofu761 fe6itr f7coize f1794535 f1o0pw0q fbjjl9v fk1v6el f16pyhcb f1ixlhx9 f12zef0i flu5r5u f19haqzy f1owmcxx f1oddm8q f1004tna fcoaxci fh0ee9u f15v23i2 f1dmj53 f1r1gcv9 f14z1veh ffufd3x f1ypplot f1660cg\" style=\"height: 143px;\" width=\"774\">\n<tbody>\n<tr>\n<th><span style=\"color: #000080;\">Particulars<\/span><\/th>\n<th><span style=\"color: #000080;\">Amount<\/span><\/th>\n<\/tr>\n<tr>\n<td>Interest on original housing loan<\/td>\n<td>INR 1,20,000<\/td>\n<\/tr>\n<tr>\n<td>Interest on additional floor loan<\/td>\n<td>INR 1,50,000<\/td>\n<\/tr>\n<tr>\n<td>Total interest<\/td>\n<td>INR 2,70,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<h3><span class=\"ez-toc-section\" id=\"Deduction_Available\"><\/span><span style=\"color: #000080;\">Deduction Available<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Although actual interest paid is INR 270,000, the deduction u\/s 24(b) will be restricted to INR 200,000 only. Balance interest cannot be claimed due to the statutory cap applicable to self-occupied property.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Treatment_of_Pre-Construction_Interest\"><\/span><span style=\"color: #000080;\">Treatment of Pre-Construction Interest<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If interest is paid on the fresh loan during the construction phase of the additional floor:<\/p>\n<ul>\n<li>Such interest is accumulated as pre-construction interest.<\/li>\n<li>It can be claimed in five equal annual installments.<\/li>\n<li>The claim starts from the financial year in which construction is completed.<\/li>\n<\/ul>\n<p>However, these installments are also subject to the overall deduction limit applicable to self-occupied property.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Impact_of_Tax_Regime\"><\/span><span style=\"color: #000080;\">Impact of Tax Regime<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #000080;\"><strong>Old Tax Regime<\/strong><\/span><\/p>\n<div class=\"___1dmoc29 f10pi13n ftgm304 f1enuhaj fdclmfp f1nbblvp fat0sn4 f1ov4xf1 fekwl8i f1lmfglv f1oz7aqm f1abmfm4 f1w619qj f16h0jq8\">\n<table class=\"___1vyiefv f1ddd56o f16vktn6 f1ahpp82 f11qra4b f1uinfot fibjyge fvueend f9yszdx f1fu4s3n f3l3pb3 f10ghnd0 f8fmt76 fjvbh62 f1qrqxae f1vw5qpk fc02sbz fxawf59 fymf513 f1aoyrul f1el8yx3 f1pymoxg f1ofu761 fe6itr f7coize f1794535 f1o0pw0q fbjjl9v fk1v6el f16pyhcb f1ixlhx9 f12zef0i flu5r5u f19haqzy f1owmcxx f1oddm8q f1004tna fcoaxci fh0ee9u f15v23i2 f1dmj53 f1r1gcv9 f14z1veh ffufd3x f1ypplot f1660cg\" style=\"height: 74px;\" width=\"842\">\n<tbody>\n<tr>\n<th>Particulars<\/th>\n<th>Position<\/th>\n<\/tr>\n<tr>\n<td>Deduction under Section 24(b) for self-occupied property<\/td>\n<td>Available up to INR 2,00,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><span style=\"color: #000080;\"><strong>New Tax Regime<\/strong><\/span><\/p>\n<div class=\"___1dmoc29 f10pi13n ftgm304 f1enuhaj fdclmfp f1nbblvp fat0sn4 f1ov4xf1 fekwl8i f1lmfglv f1oz7aqm f1abmfm4 f1w619qj f16h0jq8\">\n<table class=\"___1vyiefv f1ddd56o f16vktn6 f1ahpp82 f11qra4b f1uinfot fibjyge fvueend f9yszdx f1fu4s3n f3l3pb3 f10ghnd0 f8fmt76 fjvbh62 f1qrqxae f1vw5qpk fc02sbz fxawf59 fymf513 f1aoyrul f1el8yx3 f1pymoxg f1ofu761 fe6itr f7coize f1794535 f1o0pw0q fbjjl9v fk1v6el f16pyhcb f1ixlhx9 f12zef0i flu5r5u f19haqzy f1owmcxx f1oddm8q f1004tna fcoaxci fh0ee9u f15v23i2 f1dmj53 f1r1gcv9 f14z1veh ffufd3x f1ypplot f1660cg\" style=\"height: 71px;\" width=\"809\">\n<tbody>\n<tr>\n<th>Particulars<\/th>\n<th>Position<\/th>\n<\/tr>\n<tr>\n<td>Deduction under Section 24(b) for self-occupied property<\/td>\n<td>Generally not available<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><span style=\"color: #000000;\">Therefore, the benefit of interest deduction on the fresh loan is primarily relevant to taxpayers opting for the old tax regime<strong>. <\/strong>following are key takeaways:<\/span><\/p>\n<ul>\n<li>A fresh loan taken for construction of an additional floor qualifies for deduction under Section 24(b).<\/li>\n<li>Construction of an additional floor is treated as construction\/reconstruction\/improvement of house property.<\/li>\n<li>Proper evidence of utilization of borrowed funds should be maintained.<\/li>\n<li>Pre-construction interest can be claimed in five equal installments after completion.<\/li>\n<li>Interest on the original loan and the fresh loan must be aggregated.<\/li>\n<li>The overall deduction for a self-occupied property remains restricted to INR <strong>2,00,000 per year<\/strong> under the old tax regime.<\/li>\n<li>No separate deduction limit is available merely because a second housing loan has been taken.<\/li>\n<\/ul>\n<p><strong>Conclusion<\/strong><\/p>\n<p>A taxpayer who constructs an additional floor on an existing self-occupied house and finances the construction through a fresh housing loan can claim a deduction of the interest paid on such a loan u\/s 24(b) of the Income Tax Act. However, the benefit is not unlimited. For a self-occupied property, the interest on both the original loan and the fresh construction loan is combined, and the deduction remains subject to the overall ceiling of INR 2,00,000 per annum under the old tax regime. Therefore, while a fresh deduction is permissible, it operates within the existing statutory framework and does not create a separate deduction limit for the new loan.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>INCOME TAX SAVINGS THROUGH HOUSE PROPERTY Does your home,\u00a0 saveour income tax? Buying a house for self-occupation can be biggest tax saving instrument. \u00a0It saves your income tax in two ways. \u00a0\u00a0You can save maximum Rs 75750 per year on your home. Introduction: There are two main benefits which are available under Income Tax Act, &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[2643,2642,2641,2644],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/86"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=86"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/86\/revisions"}],"predecessor-version":[{"id":32919,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/86\/revisions\/32919"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=86"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=86"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=86"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}