Would the interest paid towards a home loan come within the 1 lac slab or is it deductible under a different section apart from the Deduction of upto Rs.1lac.
2006-10-24 00:49:05 · 4 answers · asked by Ramani S 1 in Business & Finance ➔ Taxes ➔ India
Dear Ramani,
There are no rebates available whatsoever for A.Y. 2006-07 as far as a person deriving income from sources other than speculative business is concerned. Owing to the fact that the maximum tax free limits for a lady assessee or a senior citizen have been raised to Rs. 135000 & 185000 w.e.f. A.Y.2006-07, respectively, the rebates available u/s 88B & 88C of the Income Tax Act, 1961 have been scraped. The only rebate available as of now is u/s 88E of the Act, which will not apply in case of an assesee deriving income from salary, that is to say-you.
It is quite evident from the query raised by you that you are confused between the two terms of the Act-"Rebate" & "Deduction" (pardon me, should you feel offended).
The term Rebate refers to a deduction from the tax liability that accrues to you. Deduction, on the other hand, refers to subtraction of an amount from the Gross Total Income of the assessee.
The rebate available under the erstwhile provisions of Sec. 88 has been superceded by a deduction u/s 80C of the Act. Not only that, the barring caps w.r.t. the maximum amount that could be invested in the investments detailed under Sec.88 have also been removed. So now you can claim any amount paid on account of installment of housing loan upto Rs. 1,00,000.
Sec. 80C(2)(xviii) of the Act allows any payment on account of the housing loan installment paid by the assessee. However, by virtue of Clause (C) of the exceptions provided for by the same sub-section, it is only the principal payment that shall be liable for deduction u./s 80C. The interest paid on housing loan shall be allowed u/s 24 of the Act.
I've tried to keep the language as least technical as possible & thus, not detailed the relevant sections in bare. Should you feel necessary, kindly revert back for any queries whatsoever. I'll feel obliged.
2006-10-24 23:09:50 · answer #1 · answered by Anonymous · 0⤊ 0⤋
There are no more rebates available as the Sec. 88 of the Income Tax Act has been removed. However you may claim loan principal amount repaid as deduction under Sec 80 (Slab of Rs. 1 lac)
Interest on Home loan repaid qualifies for deduction under a separate head called " Income from house proporty" upto a limit of Rs. 1.5 lacs per annum (Sec 24). It may be shown in your tax memo as under for example
Income from House Property:
Gross Annual Value ________________NIL
Less: Interest on Home Loan Repaid _95,000
_______________________________======
Income from house property_______(-) 95,000
________________________________======
2006-10-24 15:02:31 · answer #2 · answered by king_con 3 · 0⤊ 0⤋
There are quite a lot. Direct savings upto Rs. 1 lakhs is one, I think under section 80(C). This deducted from your taxable income. LTA availing, House loan taken all other qualifying categories. You can get a lot of info from rediff.com columns.
2006-10-24 07:54:20 · answer #3 · answered by SGraja 4 · 0⤊ 0⤋
Insurance premiums, national savings etc to the tune of INR 1 lac is subject to rebate according to what I understand
2006-10-24 07:57:00 · answer #4 · answered by yogodan 2 · 0⤊ 0⤋