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Any taxpayer who has purchased or constructed a house with a borrowed capital is allowed a deduction with respect to interest paid on such loan under section 24(b) of the Income Tax Act.
Such deduction of interest under section 24(b) is allowed up to Rs 2,00,000/- With the objective of ‘Housing for All’, government of India introduced additional tax benefits for taxpayers who intend to acquire, purchase or construct a residential house property. To enable this, Section 80EE & Section 80EEA has been introduced where an individual can claim deduction with respect to interest paid on borrowed capital/ housing loan. This deduction can be claimed over and above deduction of Rs 2,00,000/- allowed under section 24(b) of the Income Tax Act.
| Tax Rate | Tax Rate | |
| Who can claim deduction? | Any individual can claim deduction has a liability to pay interest on loan taken to purchase or construct a residential house property and such loan is taken from a financial institution or housing finance company. | Any individual who is not eligible under Sec 80EE, can claim deduction has a liability to pay interest on loan taken to purchase or construct a residential house property and such loan is taken from a financial institution or housing finance company. |
| What is the time limit of acquiring home loan? | The loan should be sanctioned between 1st April 2016 to 31st March 2017 | The loan should be sanctioned between 1st April 2019 to 31st March 2022 |
| What is the Quantum of Deduction allowed? | The deduction under this section shall be allowed upto Rs 50,000/- | The deduction under this section shall be allowed upto Rs 1,50,000/- |
| What are the conditions to claim deduction? | ♦ The amount of loan does not exceed Rs 35,00,000/-♦ The Value of residential property does not exceed Rs 50,00,000/-♦ The taxpayer does not own any residential house property on date of sanction of loan. |
♦ The Stamp Duty Value of residential property does not exceed Rs 45,00,000/-♦ The taxpayer does not own any residential house property on date of sanction of loan.♦ The taxpayer should not be eligible to claim deduction under section 80EE. |
| How can a taxpayer claim deduction under section 24(b) and section 80EE/80EEA? | When a taxpayer is eligible to claim deduction under both section 24(b) as well as section 80EE/80EEA, then the limit of Rs 2,00,000/- shall be exhausted first and then claim deduction under section 80EE/80EEA for any interest paid above Rs 2,00,000/- | |
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