Housing Loan Information

If you have a housing loan and wish to enter information on your income from house property, you can enter information here. You will be eligible to claim tax rebate on the interest component of your repayment during the year Apr-March by entering information under the "Home Loan" tab.

As soon as you click on the   icon on top-left in the table, you will see a row with blank fields appearing inside the table, where you can enter details of home loan interest that you have paid or will be paying for the year. Please click on the respective cells to update the required details.

You can create as many rows as you wish to enter details in the respective fields. If you wish to delete any of the rows, you could do so by clicking on the  icon at the end of the row.

Please note that you can enter interest on your housing loan here. In order to enter the principal amount repaid on your housing loan, please visit the "Investment - 80C" tab under the "Investments" tab. Click here to know more.

NOTE:

1. The interest on a housing loan shall be considered for tax deduction only if the acquisition or construction of the property, for which the loan is taken, is completed within the end of the year for which the interest is to be considered for tax deduction.
2. In case of property acquired or constructed with a loan borrowed on or after April 01, 1999, the acquisition or construction of the house property should be completed within 3 years from the end of the financial year, in which the loan was borrowed, for the loan interest to be considered for tax deduction.
3. Irrespective of the total number of rows, you can designate only one row as a self occupied property.

If your property is rented out

If the property is rented out, the income from the property shall be calculated as per the following formula.

Income from house property = Rental Income (net of municipal taxes) - 30% of rental income - Interest payable on home loans.

The income from house property can be negative when the interest payable is more that rent received. If the income from house property is a positive number, it is added to your salary for arriving at taxable income. If the income from house property is a negative number, it is reduced from your salary for arriving at taxable income.

Note:

1. Rental income should be reduced by municipal taxes, if any, paid for the property.
2. An amount equal to 30% of the rental income which is applied as a standard deduction is calculated automatically by HRWorks once you enter the rental income.
3. In case of rented out properties, there is no limit on the interest amount that will be considered for tax exemption.

The principal amount for the loan should be claimed under Section 80C along with investments such as life insurance.

If you have multiple "self-occupied" properties

In case, you have two properties where you have occupied one and kept the other property vacant, then the vacant property is "deemed to have been let-out" as per the Indian tax law. On HRWorks, you can only mark one property as a self-occupied property. When you enter details of the vacant property by creating a new row, please enter a notional rental income in the "Rent Received" field. The notional rental income is the amount you would have received as rental income had you let it out and should be arrived at in line with the guidelines of the Indian tax department. Please note that in case of "deemed to be let out" properties, there is no limit on interest on housing loan considered for the purpose of tax exemption calculation.

Some rules to remember:

1. If you fail to make house loan prinicipal repayments during a year, you cannot claim tax benefits under Section 80C on the loan.
2. You should be a owner of the house property in order to be able to claim any tax benefit on the home loan. 
3. You cannot claim tax exemptions on loans taken by others.
4. Interest on home loans taken for repairs, renewals or reconstruction, also qualify for tax rebate.
5. If you have taken a housing loan jointly with your spouse, both of you can claim tax exemption on the same loan to the extent specified as each of your share in the loan.
6. You can claim housing loan tax benefits in a year only if the construction of the house is completed during the year. If the property for which you taken the loan is under construction, then you cannot claim exemption for loan principal repayment under Section 80C. You can claim tax benefits for interest payments during the construction period across 5 years after the construction period. For example, if you paid Rs 200,000 as loan interest amount during the construction period, then you can claim Rs 40,000 for each year across 5 years after construction is completed. Please note that this amount should be included while calculating the maximum interest which is allowed for tax exemption calculation in case of self-occupied properties.
7. You cannot claim tax exemption on loans taken for purchase of land.

Proof Submission for Housing Loan Declaration

The details of the required proof and guidelines are given below for your reference.