• Oct
  • 23
  • 2013

Section 80EE : Deduction for interest on loan for residential house property

Deduction in respect of interest on loan taken for residential house property(Section 80EE):

Vide Finance Act 2013, an individual is allowed a deduction upto a limit of Rs 1,00,000 being paid as interest on a loan taken from a Financial Institution, sanctioned during the period 01-04-2013 to 31-03-2014 (loan not to exceed Rs 25 lakhs) for acquisition of a residential house whose value does not exceed Rs 40 lakhs. However the deduction is available if the assessee does not own any residential house property on the date of sanction of the loan.

Please Note :-

1. The Deduction is available for two years i.e. for A.Y. 2014-15 & A.Y. 2015-16.

2. Total Deduction which can be claimed in Both years in aggregate is Rs. 1,00,000/-.

3.  Deduction U/s. 80EE  is in addition to deduction Under Section 24. So if an assessee is paying interest on Self Occupied Property Purchased during A.Y. 2014-15 of Rs. 2.40 Lakh , he can claim interest up to 1.50 Lakh under section 24 and balance 0.90 lakh U/s. 80EE.  Assessee can claim the balance deduction of 0.10 Lakh in Assessment Year 2015-16.

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Extract of Section 80EE as per finance Act,2013 :-

Deduction in respect of interest on loan taken for residential house property.

80EE. (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 house property.

(2) The deduction under sub-section (1) shall not exceed one lakh rupees and shall be allowed in computing the total income of the individual for the assessment year beginning on the 1st day of April, 2014 and in a case where the interest payable for the previous year relevant to the said assessment year is less than one lakh rupees, the balance amount shall be allowed in the assessment year beginning on the 1st day of April, 2015.

(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, 2013 and ending on the 31st day of March, 2014;

 (ii) the amount of loan sanctioned for acquisition of the residential house property does not exceed twenty-five lakh rupees;

(iii) the value of the residential house property does not exceed forty lakh rupees;

(iv) the assessee does not own any residential house property on the date of sanction of the 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 provisions of the 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 including 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.


17 Responses to “Section 80EE : Deduction for interest on loan for residential house property”

  1. BIJOY MONDAL says:

    SIR,
    I WANT TO PURSHASE A READYMADE HOUSE BUILDIG IN D MONTH OF NOVEMBER. WEHERE I MEET ALL D CONDITION OF1. 40L(MAX PRPERTY VALUE),2.25L(MAX LOAN VALUE),3. MY FIRST H/PROPERY,4. MY FIRST HOUSE LOAN,5. LOAN APPLY FROM ALLAHABAD BANK.
    NOW MY QUESTION IS NO5.CONDITION i.e LOAN SHOULD BE SANTIONED BETWEEN 1.4.13 TO 31.3.14. HOW IT B POSSIBLE WHEN I AM APPLLY OR TAKING LOAN IN D MONTH OF NOV2014.
    SO PLZ HELP ME ON DIS SITUATION. ALSO REPLY IF ANY THING CHANGES IN D CURRENT BUDGET REGARDING SEC 24 & 80EE.
    THANKS.WAITING FOR UR SHARP REPLY ON MY EMAIL.

  2. BIJOY MONDAL says:

    SIR,
    I WANT TO PURSHASE A READYMADE HOUSE BUILDIG IN D MONTH OF NOVEMBER. EHERE I MEET ALL D CONDITION OF1. 40L(MAX PRPERTY VALUE),2.25L(MAX LOAN VALUE),3. MY FIRST H/PROPERY,4. MY FIRST HOUSE LOAN,5. LOAN APPLY FROM ALLAHABAD BANK.
    NOW MY QUESTION IS NO5.CONDITION i.e LOAN SHOULD BE SANTIONED BETWEEN 1.4.13 TO 31.3.14. HOW IT B POSSIBLE WHEN I AM APPLLY OR TAKING LOAN IN D MONTH OF NOV2014.
    SO PLZ HELP ME ON DIS SITUATION. ALSO REPLY IF ANY THING CHANGES IN D CURRENT BUDGET REGARDING SEC 24 & 80EE.
    THANKS.WAITING FOR UR SHARP REPLY ON MY EMAIL.

  3. Mahesh says:

    I have availed Housing Loan from my employer and paripasu laon from bank for my first house and claiming the exemption as applicable. Now i have availed another housing loan from bank have purchased one more apartment at other place. Now can i claim the exemption of interest and principal of both the housing loans as per the limits and show one house rental income as house property income.?

  4. Sudarshana N V says:

    Dear Sir/Madam,

    I am constricted one home around 130 lakhs in this i have taken loan 70 lakhs. my annual income is 16.50 lakhs how much can i get exemption from Tax.

    I am requesting you to reply to this mail.

    Thanking you.

  5. Maulik Shah says:

    Dear Sir,
    I have take a Home loan (Single owner) of 20 Lakh (Property cost is around 33 lakhs.) in DEC 2013 and my EMI started from JAN 2014. Now in Financial year APR 2013- MAR 2014, Rs. 55,622 loan interest amount is considered for deduction in income tax.

    In coming financial year APR 2014- MAR 2015, my loan interest amount is
    Rs. 2,00,730. So now i can get only benefit of Rs. 1,50,000 in income tax deduction?? What about remaining 50,000 Rs??

  6. Vinod Vatsa says:

    Dear sir

    Home loan sanction letter is 10th April 2013, Home loan is less than 25 Lakh, Property cost is also less than 40 lakh, I do not own any other property also, but flat is under construction possession will be in June 2016, as I have not yet get possession, I can not claim for 24b. Can I claim for 80EE without claiming for 24B.

  7. Naresh Sharma says:

    An under constrution house is not eligible for 80 EE exemption. It is available only for a pre-constructed house.

  8. Mayanand Thakur says:

    Dear Sir/Madam,

    I have purchased flat costing less than 40 Lacks and loan taken for the same is less than Rs 25 Lacs but sanction date is 29.12.2012.all other criteria I complied with.
    Whether i can claim additional benefit of Rs.100,000 u/s 80EE ?Please revert on priority

  9. Mayanand Thakur says:

    Dear Sir/Madam,

    I have purchased flat costing less than 40 Lacks and loan taken for the same is less than Rs 25 Lacs but sanction date is 29.12.2013.all other criteria I complied with.
    Whether i can claim additional benefit of Rs.100,000 u/s 80EE ?Please revert on priority.

  10. Sheshrao Natthuji Arvikar says:

    I have purchase a under contruction flat on April, 2013 and this flat will be complet on F.Y 2014-15 but loan sanction on F.Y 2013-14. In this case can I get interest benefit in F.Y. 2013-14 or not. Please sent me reply of Rs.1 lakh (80 EE), under section 24

    Thanking you
    Yours faithfully,
    S.N. ARVIKAR

  11. Rajen Kundu says:

    Hi,
    In case I have purchase a under contruction flat on Feb’14 and this flat will be complet on F.Y 2014-15 but loan sanction on F.Y 2013-14. In this case can Assess claim the additional benefit of Rs.1 lakh (80 EE) ?

  12. pitamber dutt says:

    Can i get the benifit on under construction property under section 80EE.possesion will be in 2015.

  13. Naresh Naidu says:

    Hi.

    If the loan was taken before 31/3/2013 for the sake of acquisition but the construction is starting during FY13-14. So can we claim deduction u/s80EE ?.
    suppose the loan was taken for the purpose of renewal or Construction so can we claim in the above same manner U/s 80EE. Clarify to me sir

    Regards
    Naresh Naidu

  14. Abhishek Jain says:

    Hi,

    Mr. H S Gupta : Yes. 80EE deduction is in addition to deduction U/s 24. In in one year now you can avail a total deduction of Rs. 2.5 lac during AY 14-15.

    Mr. Himanshu : Sec 24 deduction is still available as it use to be. 80 EE deduction is in addition to deduction U/s 24.

    Ms Yashoda: According to me we can claim deduction u/s80EE on additional loan.

    However, my query is whether pre-construction period concept as available u/s 24 will be applicable in this case also or not?

  15. H S Gupta says:

    Whether the said deduction simulateniously allowlbe along with Deduction of H. L Interest U/s 24

  16. Yashoda says:

    Hello,

    This querry is regarding 80EE deductions. In case Assesse is having Plot which is acquired prior to 1st Apr 2013, but started contruction during this financial year with additional loan. In this case can Assess claim the additional benefit of Rs.1 lakh by considering the property is plot and not a house?

  17. HIMANSHU says:

    then whats the use of section 24 .. plz clarify the intent of the above mentioned section 80EE ,

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