₹ 2 Lakh Deduction at Risk
Homeowners seeking tax relief under Section 24 of the Income Tax Act face a potential reduction in their benefits. Originally offering a deduction of up to ₹ 2 lakhs on home loan interest, this benefit might shrink to just ₹ 30,000 under certain conditions.
Understanding the Conditions
To claim the full ₹ 2 lakh deduction, taxpayers must meet four essential criteria:
- Borrowing capital after April 1, 1999.
- Using the loan for property acquisition or construction, not repair or renovation.
- Completing property acquisition or construction within 5 years of borrowing.
- Obtaining certification from the lender confirming the purpose of the loan.
Risk of Reduction
Failure to meet any of these conditions can lead to a drastic reduction in the deduction—from ₹ 2 lakhs to ₹ 30,000. As per FAQs on the income tax website, non-compliance with any condition results in the lower deduction limit.
ITR Filing Deadline Reminder
Taxpayers should note that the deadline for filing Income Tax Returns for FY 2023-24 (AY 2024-25) is July 31, 2024. Additionally, the deadline for late filing for the same fiscal year is December 31, 2024.
CA Amit Bansal, Partner – Direct Tax at Singhania & Co., advises, ‘Taxpayers should ensure they meet all criteria to maximise their tax benefits and avoid potential penalties for late filing.’
By staying informed about these changes and meeting the necessary conditions, homeowners can secure their tax benefits and ensure compliance with income tax regulations.
