How to E-File ITR-1 with House Property Loan

Filing your Income Tax Return (ITR) is an essential annual task for every taxpayer in India. For salaried individuals, the ITR-1 (Sahaj) is the most commonly used form. It allows individuals to report their income from salary, house property, and other sources, as well as claim deductions for savings, investments, and housing loans.

If you have a house property loan (like a home loan), you can also claim the interest paid on it under Section 24(b) of the Income Tax Act, which provides a deduction of up to ₹2 lakh per year. Here’s a step-by-step guide on how to e-file ITR-1 when you have a house property loan.

What is ITR-1?

ITR-1 (Sahaj) is a simplified income tax return form primarily used by:

• Salaried individuals with income from salary.

• Pensioners.

• Income from one house property (excluding cases where there is a loss from house property or more than one house property is owned).

• Other sources of income like interest or family pension.

ITR-1 is one of the simplest forms for filing taxes and is designed for individuals with straightforward tax situations.

How to File ITR-1 with House Property Loan?

If you have a house property loan and wish to claim the benefits of Section 24(b) (for the deduction of interest on the home loan), follow these steps:

Step 1: Collect Necessary Documents

Before you start the process, ensure that you have the following documents:

• Form 16: Provided by your employer. This document contains your salary income and tax deductions.

• Interest Certificate from your lender: This will show the total interest paid on your house property loan during the financial year.

• Details of the property: If the house is self-occupied or let out, mention the relevant details.

• Loan details: The principal repaid and interest paid during the year.

• Other Income Details: Interest earned from savings accounts, fixed deposits, etc.

Step 2: Log in to the Income Tax e-Filing Portal

1. Visit the Income Tax e-Filing Portal.

2. Log in using your User ID (PAN), Password, and Date of Birth.

Step 3: Select the Appropriate ITR Form

Once logged in:

1. Click on "File Income Tax Return" under the "e-File" section.

2. Choose ITR-1 (Sahaj) from the list of available forms.

3. Select the relevant Assessment Year (the year after the financial year in which you are filing the return).

Step 4: Fill in Personal and Income Details

In the ITR-1 form:

1. Personal Details: Fill in your name, PAN, address, email, and other details as per Form 16.

2. Income Details:

   • Salary Income: Enter the salary income details from your Form 16.

   • Income from House Property: If you own a house, provide the details of the property.

     • If the property is self-occupied, enter the value as per the prescribed guidelines.

     • If the property is rented, enter the rent received and the relevant expenses.

Step 5: Claim Deduction for House Property Loan

This is the key step if you have a home loan:

1. Section 24(b) Deduction: This section allows you to claim a deduction on the interest paid on the home loan.

   • Go to the Income from House Property section in ITR-1.

   • Select the 'Self-Occupied Property' or 'Let-Out Property' option, depending on the status of your property.

   • For a Self-Occupied Property, you can claim a maximum of ₹2 lakh under Section 24(b) for the interest paid on the home loan.

     • For a Let-Out Property, the entire interest paid on the loan is allowed as a deduction under Section 24(b).

   • Enter the principal repaid (if applicable) under Section 80C (which is capped at ₹1.5 lakh).

2. Details of the Loan:

   • Loan Amount: Enter the amount of the loan taken.

   • Interest Paid: Enter the interest paid on the home loan during the financial year, as per the certificate provided by your lender.

Step 6: Fill in Other Deductions and Taxable Income

1. Claim Other Deductions: If you have other deductions under sections like 80C, 80D (insurance premiums), 80G (donations), etc., enter those as well.

2. Calculate Total Income: After entering all sources of income, deductions, and exemptions, the total taxable income will be calculated automatically.

3. Tax Calculation: The tax on the total income will be calculated based on the income tax slabs for the relevant assessment year.

Step 7: Verify and Submit the ITR

1. Check the Details: Ensure all details are correctly filled in.

2. Verify Your Return: Before submission, you need to e-verify your return using either:

   • Aadhaar OTP,

   • Net Banking,

   • Bank Account Details, or

   • Electronic Verification Code (EVC) from your bank account.

3. Submit the Return: After verification, submit your ITR-1.

Step 8: Download ITR-V

Once your ITR-1 is filed, the ITR-V (Acknowledgment) will be generated. Download it and save it for your records.

Important Points to Remember

• Claiming Interest on Home Loan: Remember that only the interest on the home loan is deductible under Section 24(b), not the principal. The principal repayment can be claimed under Section 80C.

• Self-Occupied vs. Let-Out Property: Ensure that you correctly mention whether the property is self-occupied or let-out, as the tax treatment differs.

• Limit for Interest Deduction: The maximum deduction available under Section 24(b) for a self-occupied property is ₹2 lakh, and there is no such limit for let-out properties.

• Claiming Tax Benefits on Multiple Properties: You can claim tax benefits for interest on home loans for multiple properties, but only for one property can you claim the maximum ₹2 lakh deduction under Section 24(b) for self-occupation. For other properties, the deduction can be claimed fully for let-out properties.

Conclusion

E-filing your ITR-1 with a house property loan is a straightforward process, and by claiming the tax benefits under Section 24(b) for interest paid on the home loan, you can significantly reduce your taxable income. Make sure you have all the necessary documents, correctly fill out the form, and submit it on time to avoid penalties.

If you're unsure about any aspect of the filing process, it's always a good idea to consult a tax expert or advisor to ensure compliance and to maximize your tax savings.