Interest deduction, towards loan taken to purchase residential house, available under section 80EE is limited only for the loans sanctioned by the financial institution between the period 1st April 2016 to 31st March 2017. Any loan approved after the said defined period would not be eligible for deduction under section 80EE.

In order to boost the diminishing real estate sector and with an aim to achieve the objective of ‘Housing for all’, the Government has extended the interest deduction benefit for low cost housing loans by introducing section 80EEA.

Section 80EEA has been newly introduced in the Income Tax Act, 1961 and the same would be effective from 1st April 2020. The present article elucidates the provisions of the said newly inserted section 80EEA.

Eligibility criteria for claiming deduction under section 80EEA –

Deduction under section 80EEA is available only to an Individual. However, importantly, the individual would be eligible to claim deduction under section 80EEA, only and only if they are not eligible to claim deduction under section 80EE. Deduction under section 80EEA is available to both the resident as well as the non-resident individual.

It should be noted here that the deduction is available only to the individuals, meaning thereby that the same will not available to any other assessee like company, firm, AOP, HUF etc.

Amount of deduction –

The maximum allowable deduction under section 80EEA is INR 1.50 Lakhs. The deduction is available from the assessment year beginning from 1st April 2020.

List of conditions –

Following is the list of conditions which the assessee is mandatorily required to be fulfilled in order to claim deduction under section 80EEA of the Income Tax Act –

  • The assessee should be an individual.
  • The assessee should not be eligible to claim deduction under section 80EE.
  • The loan should have been taken for the purpose of acquisition of a residential house property.
  • The residential loan should have been sanctioned by the financial institution.
  • The residential loan should have been sanctioned between the period 1stApril 2019 to 31st March 2020.
  • The ‘stamp duty value’ of the residential house should not be more than INR 45 Lakhs.

The term ‘stamp duty value’ has been explained in the section 80EEA as the value adopted / assessable by any authority of the Central or a State Government for the purpose of payment of stamp duty in respect of the immovable property.

  • The assessee shouldn’t possess any other residential house property as on the date of sanction of the loan.
  • Once the deduction with respect to interest has been claimed under section 80EEA, no further deduction can be claimed for such interest payment under any other provisions of the Act for the same or any other assessment year.

Other Suggested Articles on Chapter VIA Deductions

1. Deduction under section 80C of Income Tax Act
2. Deduction under section 80CCC of Income Tax Act
3. Deduction under section 80CCD of Income Tax Act
4. Deduction under section 80D of Income Tax Act
5. Deduction under section 80DD of Income Tax Act
6. Deduction under section 80DDB of Income Tax Act
7. Deduction under section 80E of Income Tax Act
8. Deduction under section 80EEA of Income Tax Act
9. Deduction under section 80EEB of Income Tax Act
10. Deduction under section 80G of Income Tax Act
11. Deduction under section 80GG of Income Tax Act
12. Deduction under section 80GGA of Income Tax Act
13. Deduction under section 80GGC of Income Tax Act
14. Deduction under section 80QQB of Income Tax Act
15. Deduction under section 80RRB of Income Tax Act
16. Deduction under section 80TTA of Income Tax Act
17. Deduction under section 80TTB of Income Tax Act
18. Deduction under section 80U of Income Tax Act

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2 Comments

  1. Krati says:

    Hi I wish to ask if all the conditions mentioned in Section 80EEA has to be satisfied in order to avail 1.5lakh additional savings.

  2. Surendra Kumar S says:

    Dear Madam,

    Need clarifications about the follwoing

    1) Does Low cost House means affordable house? If yes then not only the stamp duty value, area of the property is also comes into the picture.
    2) Is it applicable from FY 19-20 or 20-21? because I have heard from CA practitioners that it is effective from FY 19-20
    3) Can we take the Interest deduction u/s 80EEA on the Top up of the loan availed in the FY 19-20 but original sanction was happened in FY 16-17 and have been claiming deduction U/s 80EE

    Thanking You
    Regards,
    Surendra Kumar S

    Thanking You

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