Answer

1. F

   Facts

   The most valuable deduction for salaried home owners in the old tax regime. Up to ₹2L of home loan interest per year is deductible from taxable income. At 30% bracket, this saves ₹60,000 in tax every year. But there are conditions: property must be self-occupied, possession must have happened within 5 years of loan, old regime only.

2. P

   Provisions and law

   • Sec 22(1)(a) (old 24(a))
   • Sec 22(1)(b) (old 24(b))
   • 5-year completion rule
3. A

   Analysis

   The ₹2L deduction in practice: Home loan outstanding: ₹40L at 8.5% interest. Annual interest paid in Year 3: approximately ₹3.3L (most of EMI is interest in early years). Section 22(1)(b), Income-tax Act 2025 (old Sec 24(b)) cap: ₹2L. Deduction: ₹2L. Tax saving at 30%: ₹60,000. Remaining ₹1.3L interest: NOT deductible for self-occupied. The ₹1.3L "wasted" interest is the cost of the cap. Why possession within 5 years matters: Loan taken FY 2019-20. 5-year deadline: March 31, 2024. If builder delays and you get possession in May 2024 (FY 2024-25 = 5 years 2 months after FY of loan): the ₹2L cap drops to ₹30,000 permanently for this property. RERA remedy: builder is liable for delay. You may claim compensation from builder. File RERA complaint if builder delays possession. Home loan interest certificate from bank: Bank provides annual home loan statement.

4. C

   Conclusion

   1. 1Confirm: old regime selected (Sec 22(1)(b) (old Sec 24(b)) not available in new regime for self-occ)
   2. 2Get home loan interest certificate from bank: shows interest paid in current FY
   3. 3Check loan date: post-April 1999 (₹2L limit) or pre-April 1999 (₹30K limit)
   4. 4Check possession date: must be within 5 years from end of FY of loan
   5. 5Submit to employer: home loan interest certificate by February 28 for TDS adjustment
   6. 6In ITR: Schedule HP → Self-occupied → Enter interest (capped at ₹2L)

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