Deduction in respect of interest on loan taken for certain house property
[As per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 131(1) of Income Tax Act 2025
(1) An assessee, being an individual not eligible to claim deduction under section 130, shall be allowed a deduction on interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property, subject to a maximum limit of one lakh and fifty thousand rupees in a tax year and on fulfilment of conditions specified in sub-section (2), for the tax year beginning on the 1st April, 2019 and subsequent tax years.
Section 131(2) of Income Tax Act 2025
(2) The deduction under sub-section (1) shall be subject to the following conditions:—
(a) the loan has been sanctioned by the financial institution during the period beginning on the 1st April, 2019 and ending with the 31st March, 2022;
(b) the stamp duty value of residential house property does not exceed forty-five lakh rupees; and
(c) the assessee does not own any residential house property on the date of sanction of loan.
Section 131(3) of Income Tax Act 2025
(3) Where a deduction under this section is allowed for any interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other tax year.
Section 131(4) of Income Tax Act 2025
(4) In this section, “financial institution” shall have the meaning assigned to it in section 130(5)(a).