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.

Home Loan Interest

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.

*****

Disclaimer: The contents of this article are for information purposes only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

(Republished with Amendments by Team Taxguru)

More Under Income Tax

21 Comments

  1. Anil Jandyal says:

    I took loan from my friend and paid Rs 36000/- interest every year. can I claim interest under sec 80EE.

    please advice me…

  2. arya says:

    Sir ,
    I have taken home loan rs. 15lakh in oct 2016 for purchasing a flat In financial year 2017-18 interest component is 129234 and principal component is 38903 . N value of my house is less than 50 lakh . Can I claim the benifit of 80ee ?

  3. C V RAMANA RAO says:

    I have taken loan of Rs. 27 Lakhs from canfin home loans for purchase of Flat, will am be to take a deduction of 50,000 under 80EE, can some one confirm on the this

  4. Dinesh tripathi says:

    Sir ,
    I have taken home loan rs. 1350000 in July 2016 for construction of a house . Construction completed in march 2017 . In this financial year 2017-18 interest component is 123464 and principal component is 37303 . Nvalue of my house is less than 50 lakh . Can I claim the benifit of 80ee ?

  5. G.Venkatesham says:

    sir
    home loan is rs 33,80,000=00 in 2016-17 FY sanctioned house value is 45 lacs
    may i claim 50,000 rs in 2017-18 u/s80EE
    PLEASE answer

  6. Prasad says:

    Sir, I took loan in16-17 for construction of house in own plot. Can I avail tax deduction u/s 80ee ? All other conditions are fulfilled u/s 80ee.

  7. J S NAILWAL says:

    Sir
    I have taken housing loan from LIC for the construction of house, in my own plot. Can I claim for the rebate of interest u/s 80EE for the construction of house ?I would like to mention here that I complete all other conditions for the same. Please reply soon as early as possible
    regards

  8. smita kariwadekar says:

    my homeloan was sanctioned in august 2016 and is under 35L and propery value is as per the limit specfied..however, the property is still under construction..can i claim the deduction of interest paid of rs 50000 ?

  9. Manjunatha says:

    Hi, i have bought a flat & registered on Dec 1, 2015 and i have taken 21 lac loan, will am be to take a deduction of 50K under 80EE, can some one confirm on the this

  10. PUNEET AGGARWAL says:

    Purchased property in the name of spouse and loan sanctioned in both name i.e. husband and spouse, payment of loan and interest made by husband . Who is eligible to claim deduction u/s 80 EE ?

  11. P.Barman says:

    Value of Flat : 49,60,000.00+ST(3.75%)+VAT(1%)
    Parking : 2,50,000.00+ST(3.75%)+VAT(1%)
    Plus registration & other misc charges.
    Loan Amount Rs 35,00,000.00

    Kindly clarify me whether I can claim deduction under section 80 EE.
    I have a confusion on whether Value of residential property inclusive of Service Tax, VAT, Parking Fee & other statutory dues or not.

  12. Vineet Kumar says:

    My home loan was sanctioned for 355000 for an under construction property but during the current financial year 3349000 was disbursed and rest amount will be disbursed at the last demand of the builder at the time o possession in April 2017 .Since Amount disbursed is less than 35 lakh in financial year 2016-17 ,am i eligible to get 50000 rebate .Loan sanctioned on 12 April 2016

  13. Vineet Kumar says:

    My home loan was sanctioned for 355000 for an under construction property but during the current financial year 3349000 was disbursed and rest amount will be disbursed at the last demand of the builder at the time o possession in April 2017 .Since Amount disbursed is less than 35 lakh in financial year 2016-17 ,am i eligible to get 50000 rebate .Loan sanctioned in 12 April 2016

    1. Amit dokania says:

      Here the acts says that the amount of loan sanctioned for acquisition of the residential house property does not exceed thirty-five lakh rupees; and your loan sanction amount exceeds the above mentioned limit..so you are not eligible to claim deduction under section 80EE.

  14. Sourav Kashyap says:

    if a person buying residental property and pay home loan interest above 300000 can they avial deduction in Sec 80EE and how much amt. claim?

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

September 2020
M T W T F S S
 123456
78910111213
14151617181920
21222324252627
282930