Lakesh Kumar

Lakesh KumarIncome Tax Benefit on Home Loan Interest under Section 80EE Of Income Tax Act. For the A.Y. 2017-18 and Subsequent Assessment Years

Introduction- Finance Minister inserted a new section 80EE relating to the additional deduction in respect of interest on loan taken for residential house property. Assessee can avail the benefits of this section in two A.Y. 2014-15 & 2015-16. Purpose of this section is to promote house ownership & give a fillip to a number of industries like steel, cement, brick, wood etc. besides jobs to thousands of construction workers. However as per new 80EE section, the deduction is available for A.Y 2017-18 and in subsequent years until the loan is repaid.

Applicability- Benefit of this section 80EE can be availed by Individual assessee. Deduction under this section is not available for any other assessee (like HUF, firm etc.). Individual can claim benefit under this section only when all the following conditions are satisfied, these are-

  • He has taken loan for acquisition of of Residential House Propety.Purchaser should be first time buyer. i.e. he has never purchased any house and now he is going to purchase a house.
  • Value of the residential house property should not more than 50 lakh.
  • Loan taken by Individual for the residential house property should not be more than 35 lakh.
  • On the date of sanction of loan individual does not own any residential house property.
  • Loan for this purpose taken by individual should be from the Bank or Housing Finance Company.
  • For this purpose, loan should be sanctioned between 01.04.16 to 31.03.17.

U/s 80EE (4) – Provides that where a 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.

Quantum of Deduction- 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.

Example- Assessee has taken a loan for the purpose of residential house property & interest payable on loan Rs. 90000/- for the A.Y.2017-18. In this case assessee can claim deduction 50000/- in A.Y.2017-18 and in the subsequent years till the loan is repaid

Clarification of Section 24 and Section 80EE-

Where the property has been acquired, constructed, repaired, renewed or reconstruction with borrowed capital, the amount of any interest payable on such capital is deductible under section 24(b), subject to the prescribed conditions.

As per Sub Section 4 section 80EE, assessee can avail deduction in respect of interest payable on loan only when assessee does not claim any deduction in respect of such interest in any other provisions of the Act.

Section 80EE- tax deducation

[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 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.]

Key Notes

1) Deduction available to individual only not to other persons.

2) Deemed owner concept does not apply in respect of such deduction.

3) Spouse would not disqualify for relief Under Section 80EE in case of residential house purchased in joint names.

4) Assessee can purchase house for both purpose .i.e. it can be for self occupied or can be Non self occupied.

5) Interest includes “any service fee or other charges in respect of money borrowed or processing fees”.

6) Date of make application to loan irrelevant but date of sanction of loan is relevant.

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

( Author is a CA Student and can be reached at E-Mail-: lakeshkr@gmail.com)

Click Here to Read Other Articles of Lakesh Kumar

(Article was First Published on 02.07.2018)

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250 Comments

  1. Ganesh says:

    Hi

    I am planning to buy house INR 30 lacs through Bank loan in FY22-23, this is my first house. can i claim additional tax benefit of INR 50000

  2. K Chalam says:

    I took a housing loan from SBI in year 2007 for 15 years and paying EMIs since then. There is a balance of Rs. 243,437 as on 1st July which I paid in lumpsum. What benefits I can claim in the AY 2020-21 ?

  3. Gurpreet Singh says:

    I am filling itr, bit confuse with 80ee, i fill my interest of home loan.
    But part B2 also showing self occupied property interest. What is difference and what i need to fill.
    This is my first time purchase for house, type of flat. I don’t have any house or property on my name befor this.

  4. vaibhav patel says:

    Dear Sir,
    If I take home loan in April 2019 can I get benefit of section 80 EE for additional deduction of 50000 above 2 lac interest payment.
    I have done process for home loan.
    It qualify two criteria regarding total value not exceed 50 lac and home loan is not more than 35 lac.

    Please share your response

    Thanks in advance !!
    Vaibhav Patel
    898002081

  5. sathish karanth says:

    Interest on housing loan – Loan taken on both self occupied and let out.
    Interest eligibility – 2 lakhs + 2 lakhs or both put together 2 lakhs

    please confirm

  6. pavani says:

    my query is related to section 80EE.

    assume a property is purchased by two individuals. property value >50 lakhs and loan amount >35 lakhs.

    in this situation, is there any scope for claiming 80 EE benefit?
    By sharing the property value and loan amount between two individuals (e.g. Property value 36 lakh and 15 lakh and loan amount 28 lakh and 12 lakh for individual A and B respectively).

  7. V.srinivasulu says:

    I received 5000 rupees as tuition fee reimbursement for 2 children from my employer and one lakh medical reimbursement whether it comes in taxable income or not

  8. B G GARG says:

    Subject: I-tax benefits u/s 80C & 80EE+ 50,000/- and I-tax benefits expenses on medical treatment
    Sir,
    1. I am working in central govt services (CWC) at New Delhi. I had purchased a 5 year old ready to move house ( 08/2016 and taken key ) at Haldwani (Nanittal) registry made in favor of my wife (House wife & fully depend on me) amounting to Rs. 36 Lakh + registry expenditure Rs. 1.64 Lakh + loan expenditure 0.26 Lakh Total amount Rs. 37.90 Lakh. I had taken advance from my GPF for above house Rs. 7.90 Lakh as margin money. Loan taken from LIC–Home loan Rs. 30 Lakh at EMI Rs. 27950/- per month for 20 year. Due to length of my service (below 3 year) LIC-HL sanction loan Rs. 30 Lakh in favor of My wife (Applicant), Myself and My son (Co-applicant) working in private org at Gurgaon & his services balance about 28 years). Can I take I-tax exemptions u/s 80cc & U/S 24 along with additional special rebate Rs.50,000/- Or my son can be take up the same. Now I want your help about Income-tax rebate as per current directions of CBDT.

    2. Today I am facing / suffering critical disease after providing of STUNT at MAX-Saket on 25/26- 06-2016 till date and due to wrong treatment / Reaction of medicine, I was facing failure of Multy -organs as Kidney, Liver, lungs & Skin (DRESS SYNDROM) etc. during the period till date, I was admitted 02 times at MAX-Saket-Delhi, 01 times at Mool Chand hospital-Delhi and 02 Times at AIIMS-Delhi
    A. I had taken all bills as per rate of CGHS but my department not reimbursement in full bill amount so that can I take Income tax benefits at balance amount of bill because it is my income loss.
    Now I want your help about Income-tax rebate as per current directions of CBDT
    Thanking yours.

    B G Garg
    Pan: ACWPG5799E
    Ph. 9891941499, e-mail bggarg123@gmail.com

  9. Brij Gopal Garg says:

    I am working in CWC at New Delhi and purchased house on 08/16 at Haldwani (Nanittal) in the ownership of my wife (House wife ) Rs. 37.90 Lakh (cost of registry & loan) for this I had taken advance from GPF as 20% margin money. LIC–Home Loan Sanction amount Rs. 30 Lakh @ Rs.27950/- P/m. for 20 year in favor of My wife (Applicant), Myself and My son (Co-applicant working at Gurgaon) my question is Who can claim I-tax benefits u/s 80C & 80EE+ 50,000/- as myself or my son.

  10. PRASANNA KUMAR BK says:

    Hello,

    I bought a flat on my wife’s name and taken a loan on both of ours name. EMI is deducting from my account.

    In this situation, who (me or my wife) will be eligible for taking tax benefit on housing loan interest part?

  11. U.K.SINHA says:

    I purchased a residential flat worth Rs 30 lakhs in November 2015 by taking loan of Rs 21 lakhs from SBI in the month of July 2014 for a term of 12 years and accordingly I am paying the EMI.Now i want to liquidate this entire loan amount(Principal+Interest) by selling my another residential flat possessed by me in May 2015 which was constructed by builder on my own inherited land.Now my question is whether the amount gained arising out from sale of my previous flat and used for liquidating loan amount used for purchasing 2nd flat comes under Tax liability or exemption from Tax?

  12. Siddharth Singh says:

    I TOOK A HOME LOAN OF 35 LACS FOR THE PROPERTY WORTH 45 LACS FOR 30 YEARS IN AUGUST 2015…LOAN IS A JOINT LOAN…PROPERTY IS GOING TO BE HANDOVER IN 2017 END…IS THERE ANY PROVISION TO CLAIM ANY TAX BENEFIT IN THIS FINANCIAL YEAR 15-16…LOAN FROM sbi

  13. shiva says:

    i made home loan repayment of 5 lakhs rupees, but from this 5 lakh i can claim only 1.5 lakhs. can i claim rest of 3.5 lakh in next financial year 2016-17.

  14. shiva says:

    I home loan sanctioned on 26/03/2012. and i took possession on 06/12/2013. the interest which accrued in that period is about 125000/- which i dint claim till now.
    i just want to know that can i divide 125000 in five equal parts and claim that in this financial year and coming financial years

  15. ADITYA GARG . says:

    Hello,

    I bought a flat on my wife’s name and taken a loan on both of ours name. EMI is deducting from my account.

    In this situation, who (me or my wife) will be eligible for taking tax benefit on housing loan interest part?

  16. Ashok Kumar Rout says:

    Sir,
    I have taken loan of 25 lacs in 2011. I did not get any tax exemption since it was possession was not obtained. Now I got possession in Nov 2015. I am claiming interest exemption on 2015-16. My question is

    1. How can i get the interest deduction 2012-13, 2013-2014 and 2014-2015.

    2.Am I eligible for first home buyer benefit of 1 lacs under 80EE

  17. Ashok Kumar Rout says:

    Sir,
    I have taken loan of 25 lacs in 2011. I did not get any tax exemption since it was possession was not obtained. Now I got possession in Nov 2015. I am claiming intrest exemption on 2015-16. My quesstion is:-

    1. How can i get the interest deduction 2012-13, 2013-2014 and 2014-2015.

    2.Am I eligible for first home buyer benefit of 1 lacs under 80EE

  18. Chetan N. Ladekar says:

    When there is two property & taken separate loan on that, but when we consider interest amt. of loan on both property or only one.

  19. Chetan N. Ladekar says:

    When there is two property & also loan on that two property at that time we considered interest amt. for deduction of two property or only one property, please reply fast.

  20. Bibhu says:

    I am a co applicant to a home loan for the property ownwed by my father. I am paying the loan installments. Can I avail tax exepmtion undr section 80EE.

  21. s.s.rao says:

    Sir just i hv taken loan from Lichf 1390000 my wife name i m co applicant i ask lic for my income tax rebate they told me tht u are eligible for income tax rebate both on principal n intetest sir pls elabrote me my position how i will get rebate in 80 c as well as some other section
    Thanks sir
    Sriniwas rao s
    All india radio
    Amravati

    ms9890830482

  22. prakash says:

    we have taken home loan f Rs.20.00 lac and we need additional loan of rs. 10.00 lacs
    kindly guide us how much interest of home loan we can claim under 80 EE

  23. P.MUKHERJEE says:

    I was bought a new flat which is under construction and i took loan of 2500000 and flat cost 3500000. Possesion will given in the month of January15 should i claim tax rebate in this financial year and i leave with my parent house and i wish to give flat in rent then will i get income tax rebate in future also up to 200000 interest.

  24. A.Venkatesan says:

    Hai,

    I am a Central Govt Employee.I have availed HBA loan during the year 1999-2000 from govt of india . I have taken insurance for the house bldg up to 2010. And forgot to renew thereafter. I have received intimation from Administration a month back asking me to show the copy of the insurance for the remaining period , ie from 2010 to 2020.

    However I have renewed the insurance during this year 2015 and have given to copy to our administration. however I have received a notice from them that My interest has been revised upward by 3 %, because of noncompliance of Insurance Clause. I have asked my employer to give Tax rebate for the additional 3% of interest. My employer says that I am not eligible for the Tax rebate on the additional 3 % interest that I am paying now.

    Last month I have completed repayment of my Principal Amount. From This month downwards I am paying the interest component.

    My loan amount is Rs 5.6 lakhs.

    Kindly advice as whether I am eligible for Tax Rebate on the additional 3 % of interest or not.

    Kindly Clarify.

    Thank You
    A.Venkatesan

  25. somesh says:

    sir as you mention home interest comes under section 24 i want to know suppose any one who take home loan 0f 2000000 and the interst is 155000 as per bank but if as tax payer i dont know exact amount of interst can i file it as 150000 in ay 2015-2016 for 2014-2015 there is any penalty for me as mismatch figure or ok if amount i shows is less then statemnt

  26. Ravi Kumar M says:

    Hi,
    I have taken the Home loan on the property which is on my mother’ name and i am paying the EMI for the same. Can i get the benefit from Tax. If yes how should i claim the same.

    Regards,
    Ravi Kumar M.

  27. NV Deshpande says:

    Dear Expert,

    I seek guidance on whether i can get incometax benefit of 80ee.

    I had taken Home Loan for 14 years period in September 2014
    for Rs. 25,00,000/- from Axis bank @ 10.15% interest for purchasing of a flat.
    My EMI is 28082/- from October 2014.

    IS it possible to get the Incometax benefit of 80EE, if so how?

    Thanks in anticipation.
    regards
    nvd.

  28. chandan jha says:

    Sir, I want to borrow land loan from DHFL/ PNB Housing finnance. Is the EMI along with interest untaxable? please clearify me.Sir, I want to borrow land loan from DHFL/ PNB Housing finnance. Is the EMI along with interest untaxable? please clearify me.

  29. Sam says:

    @Ruchi Kamra:

    You can show interest on home loan in section 80EE, and also on 24(b) ie. under head “loss from housing/property” (don’t remember the exact wording). There are conditions for both, easily accessible with a Google search.

  30. Nitin Gupta says:

    Sir,

    I have read section 80EE at Income Tax Website. No where it is mentioned that the construction of property shall be completed for claiming the benefit under 80EE. Is it true?

    My loan is qualifying all criteias but construction is still not completed.

    Nitin Gupta

  31. Tushar says:

    Dear Sir,

    My loan of RS 1800000 sanctioned in feb-14 for a resale house valued about 3000000 and occupied in mar-14. In AY 2014-15 I got benefit of following deductions:

    22000 interest (24) but i paid about 30000
    50000 stamp duty (80c) but i paid 105000

    so here
    (a) 8000 remaining interest benefit
    (b) 55000 remaining stamp duty benefit

    apart from that i also pail following charges from loan application to loan saction

    (c) 2750 bank loan application fee at bank
    (d) 2200 loan processing fee at bank
    (e) 20860 registration fee at gov. office for sale deed
    (f) 3500 advocate fee for sale deed
    (g) 6440 stamp charges at bank’s loan processing center
    (h) 6200 Mortgage registration at gov. office
    (i) 14776 property insurance at bank (insurance company)

    my question is, which things from (a) to (i), i can consider for deduction in AY 2015-15 under section 80ee?

    if anything i can avail then can file revised ITR as I already have filed return for AY 2015-16 and came to about this very late.

    Thanks in advance for your reply.

  32. Ruchi Kamra says:

    I have taken the home loan of 2311200 for purchase of house property. Interest component is 188309 as per interest certificate given by bank. where to show this amount in ITR for deduction? as there is no option of filling 24(B) section.

    Please Help

  33. Anirban Basak says:

    Hi,

    My housing loan fully satisfy with the conditions of 80EE. I have provided interest 2,17,362 for the tax year 2014-15; now while e-filling for the financial year 2014-15, I have provided 2,00000 in section 24.(maximum allowed) and provided 1,00000 in 80EE section.

    Is this correct? if not, what should be put in 80EE.

  34. Soham Roy Chaudhuri says:

    My home loan of Rs 21,40,000 (Property cost Rs 28L) was sanctioned in May 2013 but I did not apply for 80EE deductions during IT return of AY 2014-15. Can I claim the same in AY2015-16?

    Also, the property was under-construction during FY2014-15. Can I claim deduction for for section 24 / 80EE(4)? Is it eligible for deduction u/s 80C(the principle amount)?

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