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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.

However this section has been amended by Finance Act, 2016, now the  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, subject to certain conditions mentioned below:

i. He has taken loan for acquisition of of Residential House Propety.

ii. Purchaser should be first time buyer. i.e. he has never purchased any house and now he is going to purchase a house.

iii. Value of the residential house property should not more than 50 lakh.

iv. Loan taken by Individual for the residential house property should not be more than 35 lakh.

v. On the date of sanction of loan individual does not own any residential house property.

vi. Loan for this purpose taken by individual should be from the Bank or Housing Finance Company.

vii. For this purpose, loan should be sanctioned between 01.04.16 to 31.03.17.

Please Note :-

1. The Assessee can claim deduction under section 80EE on  interest payable on home loan. The amount deduction shall be the interest payable or Rs 50,000,whichever is less.The deduction is available for A.Y 2017-18 and subsequent assessment years till the loan is repaid..

2. Deduction under this section is allowed for any interest payable on loan only when 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.

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Extract of Section 80EE as per finance Act, 2016 :-

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 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.]

Also Read :

Analysis on cross connection between Sec. 80EE and Sec. 24(b)

Tax Benefit on Home Loan

Income Tax Benefits from House Property and Loan

(Republished With Amendments)

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36 Comments

  1. Dav says:

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  2. Vishnu says:

    I have loan sanctioned on 2016, but I have transferred the loan to another bank now. Can I claim exception under sec 80EE or it will be considered as new loan with the new bank ?

  3. Ajay Dhandhukiya says:

    Dear Sir,

    If loan sanctioned on 15-04-2013 for Rs. 30 Lakh, so I have eligible for deduction u/s 80EE, but it can available till repayment of loan or for how many years it can claim ??

  4. Kharat Bharat says:

    I have been sanctioned housing loan Rs.2300000/- by government, being a government employee in October, 2015. The property is a residential property and my first property. I have availed deduction u/s 24 (b) in the F.Y.2015-16. In the current F,Y. year interest paid is 2.44 lac. My taxable amount is very low i.e. Rs.45000/- Can take benefit of section 80EE in current financial year ?

  5. Ram says:

    I had availed home loan of Rs.34 lakhs in July 2015. Value of property is less than Rs.40 lakhs. Pls tell me if section 80EE is applicable for me? If yes then how much?

  6. Ramarao says:

    Hello
    “loan sanctioned during the period 01-04-2013 to 31-03-2014 (<25 lakhs amount )are the eligible for 80EE" is it correct ? or later than 31-03-2014 also are eligible to claim 100000 under 80ee.

  7. Amol says:

    Sir,

    I have purchased homein Sept 2011 which is in under construction till date. Have taken 20L loan from LICHFL. Paying EMI’s from Mar 2012 to till date. As i have not got property pessession i have not claimed anything under income tax. Most probably i will possession in Jun 2016.

    My questions are:
    1. What would be the steps i need to do to claim 2013-14, 2014/15 and 2015-16?
    2. Is this is right that you can’t claim unless you won’t get possession?

    Thanks,
    Amol

  8. ARUN KUMAR SAJJA says:

    sir,
    good morning.
    I have taken housing loan amounting to Rs. 20, 00, 000/- last year.
    i paid principal amount of Rs. 90570/- and interest amount of 1,48,381/-.
    i also have savings on LIC. Rs. 52,000/-
    ICICI,Rs. 20,000/-
    GPF Rs. 96,000/-
    TDS paid Rs. 82542.
    i would like to request you to inform about the refund of amount, i can get.

  9. Pratik says:

    Please suggest me for following query for filing income Tex.return.

    I need to claim housing loan repayment (80C) as well housing loan interest under 24 U/S. which is not considered in foam 16 for assessment year 2014-15.
    • for housing loan repayment will add principal component in 80C while filling return…….OK ?
    • however please suggest me how to claim interest component in under 24U/S while filing return.

  10. B K TIWARI says:

    i purchased a independent floor on 25 lakh in month of jan 2015 i took loan of 22 lakh my prepament of loan details for FY 2015-16 is principal 41000 & interest 2,23,000 .Can i get the benifit of 80EE

  11. Subash Sahoo says:

    Hi Team,

    I have purchase a flat under construction which is satisfy all condition for 80EE.My question is am I able to claim the interest amount which I paid for this financial year.
    I have tried on online form but could not entry. Please guide me

  12. Dinesh says:

    Sir,

    I had booked a flat in the year 2011 & paid the amount demanded by the builder by raising a loan in January, 2012 under subvention scheme. I was not required to pay either interest or EMI for the initial two years i.e. upto January, 2014 & my first EMI became due & paid in the month of February, 2014. The completion of the construction is expected during the year 2016.

    Please inform me as to whether the period of completion of construction of the house would be reckoned from January, 2012 (the month of availing home loan) or from the month of February, 2014 (the month of payment of first EMI & arising of my interest liability because till his month the interest was being paid by the builder) & whether I would be able to claim the deduction on account of interest on house loan upto 2.00 lac in the FY 2016-17.

  13. rp samant says:

    e 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 3.2% exceed twenty-five lakh rupees;
    (iii) the value of the residential house property does not exceed forty lakh rupees;but stamp and registry excluded(Rs 3,21,912).
    (iv) the assessee does not own any residential house property on the date of sanction of the loan.loan Sanctioned on 28 March 2014.
    (4) Where a deduction under this section is allowed for any interest referred to in sub-section (1).
    How much in 24(B)
    I am first time buyer. No other hime.

  14. Suresh Advani says:

    I am a central Govt. employee, I had purchased a flat and I have claimed the benefit of Housing rebate under 80C and 24B respectively. Now I have purchased another flat and I want to derive the benefit of housing rebate under 80C and 24B respectively from my office. The officer says that as the benefit for housing rebate under 80C and 24B respectively have been given already on self occupied property, this benefit cannot be given by the office. Please clarify

  15. Pankaj Rawat says:

    Hi

    I have property registered in name of my wife and myself (50% equally). For this property I have availed a loan (in my name) and paying for the EMI’s all by myself.

    As I understand, am eligible to claim tax benefits for the interest component 100% by myself?

    Can you please confirm? And share the link to Income tax section which mentions this?

    Regards
    Pankaj Rawat

  16. 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.

  17. 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.

  18. 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.?

  19. 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.

  20. 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??

  21. 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.

  22. 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

  23. 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.

  24. 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

  25. 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) ?

  26. 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

  27. 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?

  28. 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?

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