A deduction of up to Rs. 150000 u/s under section 80C is allowed from your gross total income for the principal repayment of your home loan. However, the deduction shall be allowed from the year in which possession took place even if the repayment was made in multiple annual installments.
Interest on the home loan shall be allowed as deduction u/s 24 subject to a limit of Rs. 2,00,000 in the case of self-occupied property and without any limit in case of property is rented out subject to the possession.
Your deduction on interest is limited to Rs. 30,000 if you fail to meet any of the conditions given below for the Rs. 2,00,000 rebate.
See all the conditions to claim the rebate of Rs. 2,00,000:-
- The home loan must be for the purchase and construction of a new property.
- The loan must have been taken on or after 1 April 1999.
- The purchase or construction must be completed within 5 years from the end of the financial year in which the loan was taken.