I missed on an EMI of my home loan and I was claiming the repayment as part of my Section 80C benefits. How much tax exemption shall I be entitled for in such a case?
The deduction of interest on home loan is allowed on accrual basis
I missed on an EMI of my home loan and I was claiming the repayment as part of my Section 80C benefits. How much tax exemption shall I be entitled for in such a case?
Shiv Kumar Chauhan, Jaipur
The non payment of your monthly home loan instalment will impact the tax deductions. EMI means equated monthly instalment and constitutes principal repayment and interest component. The interest on housing loan is allowed under Section 24 (b) of the Income Tax Act. The deduction of interest on home loan is allowed on accrual basis i.e. you can claim the interest amount even if it is not paid during the previous year. But remember you cannot claim the amount again when it shall be actually paid by you. Section 80 C of the Act, on the other hand, allows deduction of the principal amount of home loan only if it is actually paid during the previous year. Hence you shall be able to claim only the principal amount actually repaid by you during the year.