Additional Deduction For Home Loan Interest
As we all are
aware that, Section 80EE and Section 80EEA are two important sections
which will give opportunity to the tax payers to claim additional
deduction for housing loan interest over and above Section 24. This is
very good initiative for tax saving for the common man.
Today in this article we will see the details of these two sections. So let’s start the discussion:
a) Section 80EE – Deduction in respect of interest on loan taken for residential house property.
Deduction amounting to Rs 50,000 is allowed in addition to deduction under section 24(b).
• The loan should be sanctioned between 1st April 2016 – 31st March 2017.
• The value for the property should not exceed Rs 50 lacs and the sanctioned loan amount should not exceed Rs 35 lacs.
• The purchaser should be a first time home buyer also this is applicable only in case of residential house property.
• The benefit will be applicable till the time of repayment of loan continues.
b) Section 80EEA – Deduction in respect of interest on loan taken for certain house property.
Additional deduction amounting to Rs 1,50,000 is allowed in addition to deduction under section 24(b).
The loan should be sanctioned between 1st April 2019 – 31st March 2021.
The stamp duty value of the house should not exceed Rs 45 lacs.
The carpet area of the house should not exceed 60 sqmtr in metro cities and 90 sqmtr in other cities.
Only the individual is allowed to claim the deduction under this section provided he does not own any other house property.
Relevant Extract of Section 80EEA and Section 80EEB:
Section 80EE – Deduction in respect of interest on loan taken for residential house property.
(1) In computing the total income of an assessee, being an
individual, there shall be deducted, in accordance with and subject to
the provisions of this section, interest payable on loan taken by him
from any financial institution for the purpose of acquisition of a
residential property.
(2) The deduction under sub-section (1) shall not exceed fifty thousand
rupees and shall be allowed in computing the total income of the
individual for the assessment year beginning on the 1st day of April,
2017 and subsequent assessment years.
(3) The deduction under sub-section (1) shall be subject to the following conditions, namely:—
(i) the loan has been sanctioned by the financial institution during
the period beginning on the 1st day of April, 2016 and ending on the
31st day of March, 2017;
(ii) the amount of loan sanctioned for acquisition of the residential house property does not exceed thirty-five lakh rupees;
(iii) the value of residential house property does not exceed fifty lakh rupees;
(iv) 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 assessment 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 institution 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.
Section 80EEA – Deduction in respect of interest on loan taken for certain house property.
(1) In computing the total income of an assessee, being an individual
not eligible to claim deduction under section 80EE, there shall be
deducted, in accordance with and subject to the provisions of this
section, interest payable on loan taken by him from any financial
institution for the purpose of acquisition of a residential house
property.
(2) The deduction under sub-section (1) shall not exceed one lakh and
fifty thousand rupees and shall be allowed in computing the total income
of the individual for the assessment year beginning on the 1st day of
April, 2020 and subsequent assessment years.
(3) The deduction under sub-section (1) shall be subject to the following conditions, namely:—
(i) the loan has been sanctioned by the financial institution during
the period beginning on the 1st day of April, 2019 and ending on the
31st day of March, 2021;
(ii) the stamp duty value of residential house property does not exceed forty-five lakh rupees;
(iii) 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 assessment year.
(5) For the purposes of this section,—
(a) the expression “financial institution” shall have the meaning
assigned to it in clause (a) of sub-section (5) of section 80EE;
(b) the expression “stamp duty value” means value adopted or assessed
or assessable by any authority of the Central Government or a State
Government for the purpose of payment of stamp duty in respect of an
immovable property.
Best Regards,
- SUNIL RAJAI
