Is there any limit for the interest deduction on a home loan taken for a self-occupied house?

Yes! For self-occupied property the annual the deduction limit on interest repayment is Rs. 1.50 lakhs for any particular year including 1/5^th interest of construction period. However if the construction is not complete within there years from the date of loan, the Rs. 1.50 lakhs limit is restricted to Rs. 30,000.

If I let-out my house, what would be my interest deduction?

The interest deduction shall be allowed in full if you let-out your house. It means that the interest you have paid in the current financial year along with 1/5^th of the interest paid during construction period shall be fully allowed without any cap of Rs. 1.50 lakhs.

For example, suppose Ravi took a home loan and has given his home for rent. He paid home loan interest of Rs. 3 lakhs during the current financial year. Rs. 5 lakh was the interest paid during the construction period. However since Ravi has given his house for rent, the deduction available shall be the entire amount of interest paid during current period and 1/5^th of the interest paid during the construction period. In this case Rs. 4 lakhs. (Rs. 3 lakhs plus 1/5^th of Rs. 5 lakhs)

Had Ravi’s property been self-occupied then the maximum allowable deduction would have been restricted to Rs. 1.50 lakhs.

What will happen if I own two properties, none of which are given on rent and there is home loan outstanding for both?

In such a case you can claim for either of the property as a self-occupied while the other shall be deemed to be let-out. For the former the interest deduction shall be restricted to a maximum of Rs. 1.50 lakhs and for the later one the entire interest deduction shall be allowed without the cap of Rs. 1.50 lakhs.

In case if I co-own a property along with someone what would be the tax treatment on the interest payments?

If I co-own a property with another person what is the tax treatment of the interest payment?

In such a case it shall be assumed that there are two separate properties according to the share of each co-owner. The benefits entitled will be allowed for two separate properties.

Late take an example, Sonia and Ravi, a marred couple co-own a house in Delhi in the ratio of 40%: 60%. Both of them have been paying the EMI towards the loan they have taken for this home. Both of them are allowed a deduction up to Rs. 1.50 lakhs individually in their tax returns.

Will I be eligible for any deduction if I take a loan for some major repairs and renovation of my house?

Yes. You will be eligible for a deduction up to Rs. 30,000 in such a case. However it is essential to make sure that the repair is major or something which results in the substantial change in the structure. For example constructing a new marble floor is a major repair however whitewashing your house is not.