Income tax section Section 24, Section 24a and Section 24b deals with house property deductions which an assessee can claim under the head Income from house property. These deductions are reduced from net annual value of house which is arrived while computing the Income from House property for the particular previous year.
What is income tax section 24?
As per income tax section 24 there are two deductions from the net Annual value of house income.
- Standard deduction which is Flat deduction of 30% on Net annual value (Section 24a)
- Interest on loan taken (section 24b)
What is Section 24a of income tax?
Section 24a deals with standard deduction of 30% on Net annual value of house property. A flat deduction of 30% of net annual value is allowed as deduction in case of let out property during the previous year, irrespective of the actual expenditure incurred.
Example: If the net annual value of a rented house is ₹5,00,000, the standard deduction = ₹1,50,000 (30% of ₹5,00,000).
When standard deduction not allowed under Section 24a?
Standard deduction is not allowed in below mentioned cases:-
- Self occupied property
- Where the property is held as stock in trade and the whole/ part of the property is not let out during anytime of the PY, upto 2 years from the end of the financial year in which certificate of completion is obtained by the competent authority.
What is section 24b of income tax?
Section 24b deals with Interest on loan taken to acquire/construct/repair/renew/reconstruct a property will be allowed as deduction under this section.
What is the deduction limit under section 24b?
| Conditions | Amount of deduction for self occupied property( SOP) | Amount of deduction for Let out property(LOP)/Deemed |
| Loan taken to Acquire/Construct a property and the Acquisition/ construction is completed within 5 years from the end of the financial year in which the loan was taken | Maximum 2,00,000 in case of SOP
[Certificate should be obtained from the person to whom interest should be paid] |
No ceiling limit in case of LOP/ Deemed LOP
[Certificate should be obtained from the person to whom interest should be paid] |
| Loan take to Repair/ Renew/ Reconstruction | Maximum 30,000 in case of SOP
|
No ceiling limit in case of LOP/ Deemed LOP |
[Note: In case of SOP, 1/5th of the accumulated interest on Pre Construction period should included within the ceiling limit *Refer below to know about Pre Construction period]
Example: If ₹1,00,000 was paid as pre-construction interest, ₹20,000 can be claimed annually for 5 years.
Important points for section 24b
The amounts provided above are in case of loan borrowed on or after 1.4.99, In case the loan is borrowed before the said period then the maximum deduction allowed is 30,000. The loan should be borrowed for Acquisition/Construction/Renew/Repair/Reconstruction of the property
- Deduction is allowed on accrual basis, i.e interest amount which is accrued and not paid during the previous year will also be allowed as deduction under section 24
- If a loan is taken to repay the original loan then in such a case interest on the said loan will also be considered as deduction
- Interest accruing on unpaid interest is not allowed as deduction under this section
- Interest part of the EMI on purchase of House property will also be allowed as deduction under section 24
- Any other expenses related to the house property, are not allowed for deduction.
Pre construction period as per section 24b
The period prior to the previous year in which construction or acquisition is completed is known as pre construction period, and the interest payable during this period is known as the Pre-construction interest.
Such interest can be claimed as deduction over a period of 5 years in equal annual installment commencing from the year of acquisition or completion of construction.
Frequently Asked Questions (FAQ) on Income Tax Section 24
(1)What is Section 24 of the Income Tax Act ?
Section 24 deals with deductions under “Income from House Property.” It allows tax benefits on:
✅ Standard deduction on rental income (Section 24a)
✅ Home loan interest deduction (Section 24b)
(2)What are the two deductions under Section 24?
1 Section 24(a) – Standard Deduction: Flat 30% deduction on Net Annual Value (NAV) (only for let-out properties).
2 Section 24(b) – Interest on Home Loan: Deduction on interest paid for home loans.
(3)Who is eligible for the standard deduction under Section 24(a)?
Only let-out properties qualify for the 30% standard deduction. Self-occupied properties do not get this benefit.
(4)How much home loan interest deduction can be claimed under Section 24(b)?
| Loan Type | Self-Occupied Property (SOP) Max Deduction | Let-Out Property (LOP) Max Deduction |
| Loan for Purchase/Construction (Completed within 5 years) | ₹2,00,000 | No Limit (Full Interest Deduction Allowed) |
| Loan for Repair/Renovation/Reconstruction | ₹30,000 | No Limit (Full Interest Deduction Allowed) |
(5)Is proof required to claim the deduction under Section 24(b)?
Yes, you must obtain an interest certificate from the bank or lender as proof.
(6)Can I claim a deduction for the principal loan repayment under Section 24?
No, Section 24 only covers interest. Principal repayment is eligible for deduction under Section 80C (up to ₹1.5 lakh).
(7)Can pre-construction period interest be claimed?
Yes, pre-construction interest can be claimed, but only in 5 equal annual installments starting from the year the construction is completed.
(8)What is pre-construction interest?
Pre-construction interest refers to interest paid before the house was completed or acquired. This amount is not deductible in one go but spread over 5 years after construction is completed.
(9)Can I claim both Section 24(b) and Section 80EE deductions together?
Yes, if you are a first-time homebuyer and your loan amount is up to ₹35 lakh, and property value is up to ₹50 lakh, you can claim an additional ₹50,000 deduction under Section 80EE.
(10)Can co-owners of a joint home loan claim tax deductions separately?
Yes, if both co-owners are also co-borrowers, they can claim deductions separately in their respective ownership proportions.
(11)Can I claim a deduction if I borrowed the home loan from a relative?
No, only loans taken from banks, NBFCs, or financial institutions are eligible for deduction under Section 24(b).
(12)Who cannot claim benefits under Section 24?
🚫 Self-occupied properties do not qualify for the 30% standard deduction
🚫 If you have not taken a home loan, you cannot claim benefits under Section 24(b)
🚫 Stock-in-trade property (unsold builder flats) is not eligible for standard deduction (exempt for up to 2 years)
Conclusion
- Section 24 provides deductions on income from house property.
- Standard deduction (30%) applies only to rental properties.
- Home loan interest deduction is unlimited for let-out properties but restricted to ₹2 lakh for self-occupied properties.
- Co-owners can claim deductions separately if they have a joint home loan.