Income Tax FAQs

You are entitled to claim tax deduction up to Rs 1.5 lakh on the principal repayment of a housing loan. The deduction is available under section 80C which provides for deductions for various tax saving investments.

You can claim deduction for the pre-construction period interest in five equal instalments beginning from the financial year in which the construction is completed. Similarly, you can claim the deduction in case of purchase of property where you had paid interest on loan prior to the acquisition of the property.

You can use one house for residential purpose and declare the same for income-tax purposes. In certain cases, you can keep two houses for residential purpose, and the income from such house is treated as NIL. However, for the second house, the exemption is available only subject to certain conditions.

You can claim the municipal tax paid during the year as a deduction from income from house property. However, the deduction is only available against let out properties. You cannot claim deduction for municipal tax paid for self-occupied property (residence).

In the case of a jointly owned property, each joint owner can claim their share of the interest and principal repayments. In the case of a jointly owned self-occupied property, each owner will be entitled to interest deduction up to Rs 2 lakh and principal repayment deduction up to Rs 1.5 lakh (Section 80C limit).

There is a standard deduction of 30% of the net rental value allowed as a deduction. However, in the case of a self-occupied property, you cannot claim deduction for repairs undertaken.