Home Loan, 
Section 80C
deduction, Home Loan, repayment, Section 80C

Total Deduction Under Section 80C For Home Loan Repayment Is Capped At Rs 1.5 lakh Per Year

Deduction under Section 80C is available only under the old tax regime. Interest on gifts received from parents are taxable. Deduction for preventive health check-up is allowed up to Rs 5,000 within the overall limit of Rs 25,000 under the old tax regime

I have fully repaid my home loan in December 2023. Can I get any tax exemption for that amount as the same is paid out of my savings?


Under the provisions of Section 80C of the Income-tax Act, 1961, you are entitled to a deduction of up to Rs. 1.50 lakh in respect of any amount repaid towards home loan taken from specified institutions. This deduction is available together with other amounts paid towards life insurance premiums, and investments in equity-linked savings scheme (ELSS), National Savings Certificate (NSC), Public Provident Fund (PPF), Employees’ Provident Fund (EPF) and tax-saving bank fixed deposits (FDs).

So, though you might have paid more than Rs. 1.50 lakh, the total deduction which you can claim under Section 80C is capped at Rs. 1.50 lakh in one financial year. This deduction is available in respect of any repayment made on home loan whether by way of equated monthly instalment (EMI) or lump sum payment. Do note that deduction under Section 80C is available only if you opt for the old tax regime.


I understand that gifts received from parents are tax-free, and interest accrued on such gifts is also tax-free. Do I need to get a ‘Gift Deed’ prepared for such gifts on a stamp papers and get it duly notarised? How much can one give to a single child without incurring any tax liability?


Gifts received from specified relatives, including parents are not treated as income, and thus, are exempt from taxation, but the interest earned on such gifts are taxable. Any income which arises to the children will be taxable in their hands if they are major, and in the hands of parent with higher income is the child is minor.

There is no mandatory requirement to execute a gift deed on a stamp paper and get the same notarised. However, a simple letter from the parent to the child stating that the gift is being given out of natural love and affection, and a confirmation of the same by the child accepting the gift would suffice. There is no limit as regards the quantum up to which a parent can make a gift to his/her children. However, no single gift in cash should exceed Rs 2 lakh, or else the recipient will be liable for penalty equal to the amount of such gift.


I have paid my mediclaim of Rs. 10,000 by cash. My tax consultant says that since the premium has been paid by cash, I would not be able to claim tax benefit under Section 80D. Is it true?


Section 80D specifically provides that deduction for health insurance premium shall be allowed only if the premiums for health insurance have been paid by any mode other than cash. Do note that deduction for preventive health check-ups can be claimed even if the payment has been made by cash. A deduction for preventive health check-up is allowed up to Rs. 5,000 within the overall limit of Rs. 25,000. However, this deduction is available only if one opts for the old tax regime.

The author is a tax and investment expert

(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)

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