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Deduction available to Investment in Residential House Property

15 Jul
Income from House Property

Deduction available to Investment in Residential House Property

Deduction available to Residential Housing Property

Deduction on House Property-MyBizz

The Residential House Property gives not only shelter for life but also buying an house can also provides you tax benefits Under section 80C of the Income Tax Act,1961. In this article we are discussing the Qualifying Amount, conditions, Limits subject to which we are eligible for deduction U/s. 80C for Investment in Residential House Property.

Following are important tax benefits:

A.   Construction/Purchase/further extension of residential House Property:

Eligible: Individual or a HUF

Deduction u/s 80C : Maximum Deduction Allowable Rs.1,50,000/-

(a) any installment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or 

(b) any installment or part payment of the amount due to any company or cooperative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him (it is not applicable if the assessee is not a shareholder or member of the company/cooperative society which provided house to the assessee); or 

(c) repayment of the amount borrowed by the assessee from‑

i.  the Central Government or any State Government, or

ii. any bank, including a cooperative bank, or

iii. the Life Insurance Corporation of India, or

iv. the National Housing Bank, or

v. any public company formed and registered in India with the main object of carrying on the business of providing long term finance for construction or purchase of houses in India for residential purposes which is eligible for deduction under section 36(1) (viii), or

 vi. any company in which the public are substantially interest or any cooperative society, where such                                     company or cooperative society is engaged in the business of financing the construction of houses, or

vii. the assessee’s employer where such employer is an authority or a board or a corporation or any other                               body established or constituted under a Central or State Act, or

viii. the assessee’s employer where such employer is a public company or public sector company, or a                                  university established by law or a college affiliated to such university or a local authority or a cooperative                         society;

d)  Stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the         assessee

Deduction u/s Section 24(b): Interest on Housing Loan: Where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital upto Rs.2 Lacs (after Budget 2014). Deduction of such interest will be available only when assessee furnishes a certificate, from the person to whom any interest is payable on the capital borrowed, specifying the amount of interest payable by the assessee for the purpose of such acquisition or construction of the property, or, conversion of the whole or any part of the capital borrowed which remains to be repaid as a new loan.

Repair or maintenance:

Section: 24(b): Rs.30,000/- is allowable for Interest payable on Loan taken for repair and maintenance of self occupied house property. No deduction for Repayment of loan taken for repair & Maintenance.

B.  Sale/Transfer of Residential House Property

Section Particulars Limit of exemption
Deductions allowable from Taxable Income to Individual/ HUF
54 Investment of long-term capital gains, arising from sale of residential house or land appurtenant thereto, in purchase/construction of one new residential house (Subject to certain conditions and limits). Amount invested in one new house or capital gain, whichever is lower.
54F Investment of long-term capital gains, arising from transfer of any long term asset other than a residential house property, in one new residential house property, provided that on the date of transfer the assessee should not own more than one residential house property (Subject to certain conditions and limits). Amount invested in one new asset X capital gains/net Consideration received.
54GB Investment of long-term capital gains arising from transfer of long-term capital asset, being a residential property, for subscribing the equity shares of an eligible company and such company has, within one year from the date of subscription, utilized this amount for purchase of specified new asset (subject to certain conditions and limits). Amount invested in new asset by eligible Co. X Capital gains/Net Consideration.


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