My husband and I took out a joint home loan on June 20 for an under-construction house. We took possession of the house in July 2024. We have been paying pre-EMI so far. We are staying in a rented house and plan to move to the new house in April 2025. For the financial year 2024-2025, can we claim tax benefits on the pre-EMI amount and the rent paid?
You can claim full tax deduction benefits for interest paid during the year you take possession of the under-construction property. Therefore, in your case, the entire interest payable for the financial year ended March 31, 2025 (including the interest payable from April 2024 till the date of handover of possession in July 2024) is fully deductible under Section 24. In addition to the interest paid during the financial year 2024-2025, you can claim 1/5th of the pre-EMI interest paid/payable till March 31, 2024. You can claim HRA, provided you actually pay rent. The claim of HRA is not linked with claiming tax benefits on the home loan. The HRA and interest benefit for the self-occupied property are available only if you opt for the old tax regime. If you opt for the new tax regime, in addition to HRA benefits, you will also be eligible to claim interest for self-occupied property up to Rs. 2 lakh every year from the year of taking possession. I suggest you make the new house habitable and stay there for a few days before March 31, 2024-25. This will ensure it is treated as a self-occupied property and the annual value is taken as nil.
In addition to my salary, I have income from equity-oriented mutual funds. What will be my tax liability?
The tax on your salary will be deducted by your employer, and since the break-up of your salary is not available, it is not possible to compute the tax on your salary. The equity-oriented schemes held for less than 12 months will be taxed at a flat rate of 20 per cent under Section 111A, and if sold after 12 months, the profits will be treated as long-term capital gains and taxed at 12.50 per cent as per the budget proposal. In terms of long-term capital gains from all listed shares and equity schemes, initial profits up to Rs. 1.25 lakh will be taxed at zero rate and thus effectively come tax-free in your hands.
Regarding additional tax liability in respect of mutual fund investments, either you can discharge the tax liability yourself by paying advance tax if the total tax liability is more than Rs. 10,000 in a year otherwise the same can be paid at the time of filing of your ITR as self-assessment tax. Alternatively, you can declare this income to your employer, and then the employer will deduct additional tax from your salary, taking into account such additional income as well.
Can I pay and claim a deduction under Section 80 C in my ITR for a life insurance premium for my daughter, a doctor employed in a hospital?
As per section 80C, you can claim a deduction for life insurance premiums paid for yourself, your spouse, and your children, whether minor or major, or whether you are financially dependent. So you can claim the tax benefit under section 80C for the life insurance premium paid for your daughter, even though she is financially independent. Please note that deduction under Section 80C is available only under the old tax regime.
The author is a tax and investment expert and can be reached on jainbalwant@gmail.com
(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)
