Section 24(b) allows a deduction of up to ₹2 lakh for home loan interest on self-occupied property (or full interest for let-out) under "Income from House Property" in ITR-1 or ITR-2. Report this by entering the total interest paid (from your bank certificate) in the "Interest payable on borrowed capital" field within the Schedule HP.
In the ITR form, navigate to the section for "Income from House Property." Under this section, enter the details of the loan and the interest paid. For self-occupied properties, you can enter the interest deduction up to ₹2,00,000.
Enter Interest Amount:
In the ITR form, look for the section where you can claim deductions for interest on housing loan (Section 24(b)). Enter the amount of interest paid during the financial year. Ensure the amount matches with the figure mentioned in Form 16 or the interest certificate.
Under current regulations, you can file an "updated return" until March 31, 2027, for AY 2024-25.
However, if you have opted for the new tax regime, you will not be eligible for any tax benefits under Sections 80C, 24(b), 80EE, or 80EEA—except for one exception. Under Section 24(b), a deduction is available for let-out properties.
Yes, individuals can claim deductions under both Section 24 and Section 80EE of the Income Tax Act, provided they meet the respective criteria. Section 24 allows deductions on interest payments, while Section 80EE offers additional deductions specifically for first-time homebuyers meeting certain conditions.
As an NRI, PIO, or OCI, you may be required to file tax returns in India if your Indian income surpasses the specified threshold or if you seek to claim refunds for excess tax deductions. While filing an ITR is mandatory only under certain circumstances, voluntary filing can be beneficial in many ways.
Common Tax Filing Mistakes
Assessed tax refers to the total tax liability after deducting TDS, TCS, and advance tax already paid. It forms the basis for calculating interest under Section 234B. The Interest is charged at 1% per month or part of a month on the assessed tax.
Claim deduction on home loan interest under Section 24(b)
Under Section 24(b) of the Income Tax Act, you can claim a deduction of up to Rs. 2 lakh per year on the interest paid on your home loan for a self-occupied property. This benefit applies to both the old and new tax regimes.
Common ITR Filing Mistake 1: Missing the Filing Deadline
The most avoidable mistake is missing the due date. For most individual taxpayers, the deadline for FY 2024-25 is 15th September 2025 (extended from July 31).
If you took a home loan between April 1, 2016 - March 31, 2017, and meet the eligibility criteria, you qualify for Section 80EE. However, if your loan was sanctioned between April 1, 2019 - March 31, 2022, and your property's stamp duty value is ₹45 lakh or less, you can claim Section 80EEA.
To claim deductions under Section 24B, several conditions must be met: The loan must be from a recognized financial institution, and documentation such as interest certificates is essential. The property must be residential, and the purpose of the loan must align with purchase, construction, repair, or reconstruction.
No, mortgage interest isn't always 100% deductible; it's subject to limits and conditions, primarily that the loan must be for buying, building, or improving your main or second home, and you must itemize deductions, with current limits at $750,000 of debt ($375k if married filing separately) for loans after December 15, 2017, while older loans have a $1 million limit, and you can only deduct the interest portion, not principal.
Common Mistakes While Claiming Section 24B
Filing a claim on loans from unapproved sources can lead to disallowance during assessment and may attract notices from the Income Tax Department. Another common error occurs when reporting interest without the proper certificates from banks or lenders.
ITR Filing Charges:
Salaried ITR Filing: ₹1,000/- Capital Gain / Share Gain-Loss ITR: ₹1,500/- Business ITR – 44AD Return: ₹2,000/- All other ITR Filing: ₹3,000/-
The IRS uses a combination of automated and human processes to select which tax returns to audit. Not reporting all of your income is an easy-to-avoid red flag that can lead to an audit. Taking excessive business tax deductions and mixing business and personal expenses can lead to an audit.
Penalties for Incorrect ITRs and False Deductions
Under-reporting: Penalty = 50% of tax payable on the under-reported income. Misreporting (e.g., claiming false deductions): Penalty = 200% of tax payable.
With effect from Assessment Year 2020-21, deduction for interest paid or payable on borrowed capital shall be allowed in respect of two self-occupied house properties. However, the aggregate amount of deduction under this provision shall remain same i.e., Rs. 30,000 or Rs. 2,00,000, as the case may be.
NRIs are not eligible for the simpler ITR-1 form and must file using ITR-2 or ITR-3 depending on their specific financial situation. Choosing the correct form ensures compliance with Indian tax laws and avoids penalties or delays.
Just because you reside in the U.S. does not mean you have to go back to India to file your Indian income tax return. Today, there exists a process of electronically filing your returns, allowing you to do your job without having to physically go to India.
Below-enlisted are the 7 best tax saving options other than Sec 80C.
Standard Deduction: Under the old tax regime, salaried individual taxpayers are eligible for standard deduction of ₹50,000 irrespective of their annual income. Under the new tax regime, standard deduction limit has been increased to ₹75,000 for the fiscal.
Federal income tax returns are due April 15, although people who need more time can file for an automatic tax extension before that. An extension gives taxpayers until Oct. 15 to file, although any taxes owed must still be paid by April 15 to avoid penalties.