All applicants who have taken home loan to buy an apartment can avail tax benefits.Interest can be claimed as a deduction under Section 24. You can claim up to Rs. 150,000 or the actual interest repaid whichever is lower. (You can claim this interest only when you are in possession of the house) Principal can be claimed up to the maximum of Rs. 100,000 under Section 80C. This is subject to the maximum level of Rs 100,000 across all 80C investments. The Actual Tax Exemption depends solely on the Monthly EMI being paid.

Deductions claimed

Owner and co-owner(s) can claim separate deductions in income tax returns.The repayment of principal amount of the loan and interest can be claimed as a deduction individually by each co-owner.You will need to show the statement provided by the lender showing the repayment for the year as well as the interest & principal components of the same.

Note

If you took a home loan and you are still living in a rented place, you will be entitled to: Tax benefit on principal repayment under Section 80C , Tax benefit on interest payment under Section 24 and HRA benefit.

Of course, you can claim tax benefits on the home loan only if your home is ready to live in during that financial year. Once the construction on your home is complete, the HRA benefit stops. If you took a home loan, got possession of the house, have rented it out and stay in a rented accommodation, you will be entitled to all the three benefits mentioned above. However, in this case, the rent you receive would be considered as your taxable income.