Section 130 — Deduction in respect of interest on loan taken for residential house property

(1) An assessee, being an individual, shall be allowed a deduction of
interest payable on loan taken by him from any financial institution for the
purpose of acquisition of a residential house property as per the provisions of this
section.
(2) The deduction under sub-section (1) shall not exceed ` 50000 and shall be allowed
in computing the total income of the individual for the tax year beginning on the
1st April, 2016 and subsequent tax years.
(3) 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, 2016 and ending on the 31st March, 2017;
( b) the amount of loan sanctioned for acquisition of the residential house
property does not exceed thirty-five lakh rupees;
( c) the value of residential house property does not exceed fifty lakh rupees;
and
( d) the assessee does not own any residential house property on the date of
sanction of loan.
(4) 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.
(5) For the purposes of this section,—
( a) “financial institution” means a banking company to which the Banking
Regulation Act, 1949 (10 of 1949) applies, or any bank or banking insti-
tution referred to in section 51 of that Act or a housing finance company;
( b) “housing finance company” means a public company formed or registered
in India with the main object of carrying on the business of providing
long-term finance for construction or purchase of houses in India for
residential purposes.