Learn what is Section 24 and how income tax on house property works. Claim up to ₹2 Lakhs in deduction on home loan interest, understand types of house property in income tax, and locate
Section 24 of the Income Tax Act, 1961 can significantly reduce your income tax on house property expenses. Under Section 24, you can claim deductions on both interest paid for self‑occupied and rented properties. In addition, Section 24(b) of the Income Tax Act allows pre‑construction interest to be spread over five years.
Whether you’re wondering what is section 24 or how income from house property in income tax is calculated, this guide breaks down eligibility, limits, and ITR form placement — especially where is section 24 in ITR form — in easy-to-follow terms.
Section 24 of the Income Tax Act provides tax relief on the interest component of home loans under the head income from house property, whether the property is self‑occupied or let out. For a self‑occupied property, taxpayers can deduct up to ₹2 Lakhs per annum from interest paid; in the case of rented or deemed‑to‑be‑let‑out properties, the entire interest qualifies for deduction.
Furthermore, Section 24(b) of the Income Tax Act allows taxpayers to spread pre‑construction interest over five years, starting from the year of possession or completion. The total deduction—whether from pre‑construction or current interest—must be within the ₹2 Lakhs annual limit for self‑occupied housing.
When is Section 24 Applicable
The provisions of Section 24 of the Income Tax Act apply in the following circumstances:
Individuals with a self‑occupied house property and outstanding home loan interest up to ₹2 Lakhs per financial year can claim the deduction.
For a rented or deemed‑to‑be‑let‑out property, the entire interest can be claimed without any cap.
Pre‑construction interest, paid during the construction phase, becomes deductible in equal instalments over five years post‑completion under Section 24(b).
The deduction applies only if the home loan is for purchase, construction, repair or reconstruction of the property and the construction is completed within five years from loan disbursal.
An interest certificate from the lender is mandatory to claim any deduction under this section.
What Is Income From House Property under Section 24
Income from house property in income tax refers to the taxable income derived from owning property under Section 24. It's computed after allowing deductions for municipal taxes, standard deduction, and home loan interest. Here’s how it breaks down:
Gross Annual Value (GAV): For rented property, this is the actual rent received; for deemed let‑out, it’s the fair market rent; and for self‑occupied, it’s nil.
Municipal Taxes: Municipal taxes paid during the year are deductible from GAV to compute Net Annual Value (NAV).
Standard Deduction: A standard deduction of 30 % of NAV helps cover maintenance or repairs for rented or deemed properties.
Home Loan Interest: Up to ₹2 Lakhs for self‑occupied and full interest for rented properties is considered. Pre‑construction interest is apportioned over five years.
The result, after all these deductions, is the income from house property, which is added to the taxpayer’s total taxable income.
Section 24 splits into sub-sections to define specific deductions under income from house property. Each part addresses different kinds of deductions, making it easier to apply them correctly when filing your ITR.
Section 24(a): Standard Deduction
Under Section 24(a), you can claim a flat deduction of 30% from your Net Annual Value (NAV). This deduction helps cover maintenance costs for rented or deemed-let-out properties, without needing any bills or documents. It is not available for self-occupied homes.
Key takeaways:
Applies only to properties generating rental income.
You calculate NAV by subtracting municipal tax from Gross Annual Value (GAV).
You can claim 30% of NAV irrespective of actual expenses.
No proof required; it simplifies tax computations.
Not available for self-occupied property, as NAV is zero there.
Example:
Here is an example to help you understand how these deductions work. Suppose Ravi has a rented-out property with a GAV of ₹5 Lakhs. He pays ₹30,000 in municipal taxes. By deducting this from the GAV, the NAV is found to be ₹4.7 Lakhs. Under Section 24(a), 30% of this NAV, or ₹1.41 Lakhs, is deductible.
Section 24(b): Home Loan Interest
Section 24(b) allows deductions on interest paid for a home loan. Self-occupied property qualifies for up to ₹2 Lakhs per year. Let-out or deemed-let-out properties can claim the full interest amount, with no cap. Pre-construction interest is spread over five years.
Key takeaways:
For self-occupied properties, deduction is capped at ₹2 Lakhs annually.
For let-out properties, the entire interest amount is deductible without limit.
Pre-construction interest is claimed in five equal parts post-possession.
Loan must be taken on/after 1 April 1999, and property completed within 5 years.
An interest certificate from the lender is mandatory for claims.
Example:
Suppose Ravi paid ₹2.5 Lakhs as interest this year. Since his flat is rented out, he can claim the full ₹2.5 Lakhs under Section 24(b). Assume he also paid ₹1 Lakh as pre-construction interest. By starting possession in March this year, he claims ₹20,000 (1/5th) now as part of pre-construction interest. So, his total interest deduction = ₹2.5 Lakhs + ₹20,000 = ₹2.7 Lakhs.
The table below breaks down the details of Ravi’s assumed deductions line by line:
Particulars |
Amount |
Gross Annual Value (GAV) |
₹5,00,000 |
Municipal Taxes |
₹30,000 |
Net Annual Value (NAV) |
₹4,70,000 |
30% Standard Deduction (u/s 24(a)) |
₹1,41,000 |
Deduction on Home Loan Interest (u/s 24(b)) |
₹2,70,000 |
Total Deduction |
₹4,11,000 |
Disclaimer: The above figures are indicative and for illustrative purposes only.
Here is how the deductions would apply u/s 24(b), if this was a self-occupied property:
Parameters |
Amount |
Gross Annual Value (GAV) |
NIL |
Deducting the municipal tax from the GAV to calculate the NAV |
NIL |
Net Annual Value (NAV) |
NIL |
30% Standard Deduction (u/s 24(a)) |
NIL |
Deduction on Home Loan Interest (u/s 24(b)) |
₹2 Lakhs |
Loss from housing property |
₹2 Lakhs |
Disclaimer: The above figures are indicative and for illustrative purposes only.
Note:
The limit for this deduction will be capped to ₹30,000 in the following cases:
The housing loan was taken before 1st April, 1999
You have used the borrowed capital for reconstruction, repair, or renovation
You have availed of a housing loan on 1st April, 1999, or later, but the housing construction was not complete in 5 years
Also, remember that the deduction is not allowed until and unless you provide the certificate of payment of housing loan interest.
In order to claim deductions under Section 24 of up to ₹2 Lakhs, the taxpayers have to fulfil the following criteria:
The taxpayer was sanctioned a housing loan on or after 1st April 1999 to purchase or contract a property
The taxpayer has to have the certificate of payment of housing loan interest
The housing property has to be constructed or acquired within five years from the completion of a fiscal year in which the taxpayer borrowed the loan
Some of the exceptions under this section are:
The taxpayer has to submit the certificate for interest against the housing loan
No deductions for brokerage/commission, but municipal tax can be factored into housing property NAV calculation
In case the owner does not occupy the house, there is no upper limit to the tax that can be deducted
If the owner resides in a rented house due to business/employment, they can claim up to ₹2 Lakhs interest on home loan
Section 24 offers substantial tax relief for homeowners by allowing deductions on both rental income and home loan interest. With clear rules—₹2 Lakhs for self-occupied homes and full interest benefit for rentals—you can efficiently minimise your income tax on house property.
Ensure you maintain documents like loan interest certificates, municipal tax receipts, and proof of construction completion. Smart use of Sections 24(a) and 24(b) brings real savings while keeping your ITR accurate and compliant.
FAQs
Where is Section 24 in the ITR form?
Section 24 deductions are claimed under Schedule HP – Income from House Property in ITR‑1, ITR‑2, or ITR‑3. You enter details like property type, municipal taxes, and home loan interest in this section. The form then computes your net taxable income automatically.
Are Sections 24 and 80EE different?
Yes, Section 24 offers deductions on home loan interest—₹2 Lakhs limit for self-occupied and no limit for rented properties. Section 80EE is for first-time homebuyers and gives up to ₹50,000 extra interest deduction under strict conditions. Both can be claimed separately if you qualify.
Who can claim Section 24?
Anyone owning a residential property and paying home loan interest can claim Section 24. Self-occupied homes get up to ₹2 Lakhs deduction, and let-out/deemed-let-out properties can claim the full interest paid. Even pre-construction interest qualifies, once possession is taken.
Can I get tax benefits for an under-construction property?
Yes. Under Section 24(b), interest paid before construction completes (pre-construction interest) can be claimed over five years starting from the year of possession. However, the total deduction per year—including current interest—cannot exceed ₹2 Lakhs for self-occupied homes.
Can I claim both Section 80EEA and Section 24?
Yes, you can claim both if you meet eligibility conditions. Section 24 offers a ₹2 Lakhs deduction for interest, while Section 80EEA provides an additional ₹1.5 Lakhs for affordable housing first-timers. They apply independently on the same property’s interest.
What is the difference between sections 80C and 24?
Section 80C covers principal repayment, stamp duty, and registration costs up to ₹1.5 Lakhs per year. Section 24 applies to the interest repayment on home loans—up to ₹2 Lakhs for self-occupied and unlimited for rented properties. Sections 80C and 24 together maximise home loan tax saving.
What is the Section 24 deduction list?
Under Section 24 deductions include: municipal taxes paid, 30% standard deduction on NAV for rented homes, ₹2 Lakhs interest on self-occupied home loans, full interest on rented homes, and apportioned pre-construction interest over five years post-possession.
Can I claim both Section 24 and 80EE?
Yes—Section 24 covers interest up to ₹2 Lakhs, and Section 80EE offers up to ₹50,000 extra interest deduction for first-time buyers. You can claim both if you fulfil the eligibility criteria for 80EE.
What is Section 24 of the new tax regime?
Even under the new tax regime (Section 115BAC), you can still claim Section 24(b) deductions on home loan interest (up to ₹2 Lakhs for self-occupied or full for rented) and the 30% standard deduction for rental income.
How do I claim Section 24?
Claim Section 24 in ITR by filling Schedule HP. Enter financial details—GAV, municipal taxes, NAV, home loan interest, and if applicable, pre-construction interest. Upload your interest certificate and municipal tax receipt when filing to support your claim.
Other Investment Products
Quick Links
Know Your Tax Liability | Calculate Your Income Tax Now!
