You can get tax benefits for both your loans. However, this will be subject to limits as mentioned in the Income Tax Act.
Section 24 – Tax Deductions on Home Loan Interest:
Deduction amount: A deduction of up to Rs.2,00,000 – if the homeowner or his / her family resides in the house property in question, and even if the house is vacant.
Deduction eligibility: In case the owner does not meet any of the following criteria, the maximum deduction will be capped at Rs.30,000:
The loan must have been taken on, or after the 1st of April, 1999.
The purchase / construction of the house property must have been completed in full within a period of 3 years from the end of the financial year in which the loan was taken.
The loan must be taken for the specific purpose of purchase and construction of a new house property
Loan purpose: If the loan has been taken for reconstruction, renewal or repair, only Rs.30,000 can be claimed as deduction.
Stage of construction: Deductions cannot be claimed when the house property is still under construction.
Deductions can only be claimed starting in the financial year in which the construction of the property has been completed.
Pre-construction period: The time period between when you take out the Home Loan right up to the when the construction is finished is called the pre-construction period. Interest paid on the loan during the pre-construction period can be claimed as 5 equal deduction instalments starting in the financial year in which the property was completely constructed.
Section 80C – Tax Deductions on Principal Repayment:
Deduction amount: Rs.1,50,000 is the maximum limit. This comes under the overall limit of the various Section 80C deductions that are available.
Deduction eligibility: For this deduction to be made, the claimant must satisfy the following eligibility criteria:
From the date of possession, the property should not be sold for a minimum of 5 years.
If the property has been sold within 5 years from the date of possession, the deductions will be added back to your income in the year of sale.
Charges: Under Section 80C, claims for a maximum deduction amount of up to Rs.1,50,000 can be made also for and including the charges for: Stamp duty, registration and transfer related expenses.
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