Lakesh Kumar
Income 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.
[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)
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(Article was First Published on 02.07.2018)
Hi i have taken teh loan and wnat to file returne during that time there is 80EE query,
i have taken teh loan amount of 26,80,000, and my house cost is 33.5 lac and rest of the points are eleiglble
1. Purchaser should be first time buyer. i.e. he has never purchased any house and now he is going to purchase a house. i am first time
2) Value of the house should not more than 40 lakh. less than 40 lac i.e 33.5 lac
3) Loan taken by Individual for the purpose of buy a house should not be more than 25 lakh. loan amount is 26, 80, 000 only this point is excedding above 25
4) On the date of sanction of loan individual does not have any own residential house property. i do not have
5) Loan for this purpose taken by individual should be from the Financial Institution or Housing Finance Company. yes it is LIC
6) For this purpose, loan should be sanctioned between 01.04.13 to 31.03.14. yes loan taken in this tennure
pleasae advice whether i can delcare under 80EE in current FY2014-2015?
Sir,
I have two housing loans.
I availed first loan in 2002 in Bangalore for 5.95 lakhsand my parents are staying in this house.
I avialed second loan in June 2013 in hyderabad for 43.58 lakhs and this is under construction and will be occupied by June 2015.
Iam staying in rented house near to my office now.
Iam paying total interest on botgh the housing loans is about 3,45,000 in FY 14 – 15.
Please inform me that how much exemption will get under interest paid.
Hi,
Mine is composite loan and i’m been paying interest from last may 13 and i have started construction now and it would be completed before Dec 14. so please let me know whether i can declare Interest on Housing Loan(24) & 80C – Principal Loan Repayment (Housing Loan) in current financial year.
I would be acquiring to my new house by Jan/Feb 14. so even i would be able to produce acquire certificate to my employer by that time.
My employer deducting my IT on monthly basis so if i declare it now them i can save some money.. looking forward to hear from experts.
Thanks and regards
Jagadeesh R
Hi,
I worked in two organizations in different cities in last financial yr, i.e. from April’14 to Aug.’14 then in another city and organization from Sep.’14 onward.
My query is as I didn’t claimed my house rent in my previous organization and they deducted tax on HRA also now the rule from Oct.’14 onward is Lakh limit on the rental amount when PAN card of the landlord is not required.
The rent reciept which I have from my previous landlord doesn’t carry any PAN details.
When I calculate house rent for whole year it sums up to more than 1 Lakh, please suggest how to get Tax benefit while filing the return in July.
Regds,
Ashutosh.
Bandana, According to me loan taken for purchase of property,Interest on housing loan is expenditure in acquiring the asset & it can be capitalised as cost of asset.
Nitin Sir, Tax deduction for the payment of interest shall not be allowed before the construction is complete. However pre-construction interest can be claim in five equal installment from the year in which construction is complete u/s 24(b).We can not claim interest deduction for under construction property u/s 80EE.
My loan was sanctioned in January 2014, and upto March 2014 Pre construction Loan Int of rs 40000/- was paid and final disbursement was in April 10 i.e. next financial year so how can i take the benefit of Section 80EE.
Please advice
If I sell a property for which I am paying home loan EMI before registering the property in my name, can I consider the interest component paid till date as a cost of property/acquisition while calculating long term/short term gain.
Sumit Jain, You can get deduction u/s 80EE in F.Y. 2013-14 of Rs.70000/- and in F.Y. 2014-15, maximum interest deduction u/s 80EE is available of Rs.30000/-
Hari Sir, You can claim interest & principle amount on both properties subject to some conditions.
rohit Sir, As you said you got loan FAB 2013, then you are not able to get deduction u/s 80EE
Rupesh Mehani,Sir you are not eligible to get deduction u/s 80EE.
Sir,
In Dec-2008 I had purchased a flat on both husband & wife’s (I husband was the first name & wife was the co-borrowe at Kanpur with HL of 1600000/- from SBI & sold out in 2012. With that whole amount now I have taken another flat on both husband & wife’s name ( here my wife is the first name & I husband is the co-borrower) with HL of Rs 3500000/- from SBI at Goa in Jan-2014.
Can I/we avail the benefits of Section 80EE ?
Dear Mr Lakesh,
I have read all the comments & found then usefull, I still have a question. I fulfill all the below mention creiteria…
◦Purchaser should be first time buyer. i.e. he has never purchased any house and now he is going to purchase a house. (applicable)
◦Value of the house should not more than 40 lakh.(30L, applicable)
◦Loan taken by Individual for the purpose of buy a house should not be more than 25 lakh. (23.7L, applicable)
◦On the date of sanction of loan individual does not have any own residential house property. (1st loan, applicable)
◦Loan for this purpose taken by individual should be from the Financial Institution or Housing Finance Company. (Nationalised Bank, Applicable)
◦For this purpose, loan should be sanctioned between 01.04.13 to 31.03.14. (The 1st amount release from the Bank to the builder is on FEb 2013, doubtful)
Please let me know whether I am eligible for this claim or not. Thanks in advance
Hi,
I have two houses one is self occupied and second one is let out. Can I claim the interest of both property.
1) Loss of income of first house after (Rent income and standard deduction) = (-)3,00,000
After tax deduction of 1,50,000 = (-)1,50,000
2) Loss of income of second house after (Self occupied) = (-)3,30,000
After tax deduction of 1,50,000 = (-)1,80,000
Total Loss on income + Tax deduction on interest
(-)1,50,000 + (-)1,80,000 = (-)3,30,000
Can we claim the principal of 1st or 2nd house ?
Whether the date/year for application date for home loan u/s 80EE (currently FY 2013-14) got extended during latest budget by UPA government?
Where to be shown section 80EE in form 16
F.Y 13-14 if bank charge me interest amount 220000.00 then can i get the interest benefit u/s 24 amount 150000.00 plus u/s 80EE 70000.00 and if in next F.Y they charged me interest amount 200000.00 then what is the amount of deduction u/s 80EE?
I had taken a Home Loan from HDFC Ltd. for Rs.12.60 Lacs in Year’2008 and want to avail the additional benefit of U/s 80EE. Whats the procedure of the same as my repayment schedule as follows:
Principal – 65000/- p.a
Interest – 120000/- p.a
Can i pay extra interest amount for obtaining benefit of u/s 80EE.
Secondly, i want to reduce the ROI and HDFC is charging “Conversion Fee”. Will i get the benefit of this fee in income tax.
Dear Lakesh,
I got a question.
I had constructed a house at my home town and I took a loan for Rs.15 lacs.
What all deductions can I get?
I plan to rent out this property as I am staying away from my home town.
So do I show my Rental income +Salary income and claim deduction under 24 1 and for Principle amount?
Can I avail deduction under 80 EE also? Loan was sanctioned Dec 2013 last year and fully disbursed to me on April 15th. 2014
Please advise
Dinesh.
Hi Team,
I purchased a DDA LIG Flat in 2012 by taking loan of 1700000 for 20 years from HDFC. Now i am transfering my loan to another bank and lessing the tenure to 12 years . Will i be eligible for a 1 lakh additional tax rebate under Section 80E.
Hi,
I & my brother took load of 24lacs from LIC housing finance and my brother is getting tax benfit from them is it possible that bothof us will get the tax benefit as monthly installment paid by my brother’s account only.
Hi Lakesh,
Greetings of the day !!!
I fall under all the pre·requisites of Section 80EE Income Tax Benefit on Home Loan Interest however, my loan got sanctioned on April 11th, 2014 so I’m debarred from this benefit.
Query:
• I just need to confirm that whether I should fill my Income Tax
declaration under 80EE or Other Income/Loss from House.
• I’ve given my house on Rent for Rs 10,500 per month & paid Pre-EMI of
Rs 13,901 (actually paid 14,463/- as Rs 562/- was for Govt. surcharge).
• For tax benefit over Pre-EMI, do I need to declare only 1/5th of
Pre-EMI for 5 years. (14,463/5 = 2892.60/-)
PS: I’ve sent you an E-mail with all the screen-shot details.
Please revert once you get time.
Thanks,
Atul Choudhary
Loan taken: Individual
Total Loan Amount: 2039105 Lakh
Loan approved in November 2013
First monthly installement in December 2013
Total Principal paid in 2013: 10600 INR (From December to March 2013)
Total Interest paid in 2013: 69196 INR (From December to March 2013)
Total Principal to be paid in 2014: 31800 INR
Total Interest to be paid in 2014: 207588 INR
I have not declared anything under 80EE in 2013.
Also, I fulfill all the below conditions:
1) Purchaser should be first time buyer. i.e. he has never purchased any house and now he is going to purchase a house.
2) Value of the house should not more than 40 lakh.
3) Loan taken by Individual for the purpose of buy a house should not be more than 25 lakh.
4) On the date of sanction of loan individual does not have any own residential house property.
5) Loan for this purpose taken by individual should be from the Financial Institution or Housing Finance Company.
6) For this purpose, loan should be sanctioned between 01.04.13 to 31.03.14.
How much I can declare under 80EE in current FY2014-2015?
Thanks
Tarun Sir, As you said that your mother owner of the property, in this case you can not get deduction.However you can avail if you are co-owner of the said property.
Dear Lakesh,
I have bought a House of Rs 40 Lakhs on name of my mother. House Loan is taken by me along with my mother as Co owner. Sanction of loan of Rs 20 lakhs is done on 31 March 2014. Whether I am eligible for above mentioned Deduction under section 80EE. Pls ensure that House is on name of my mother only.
Arijit Sir, You are not able to get deduction u/s 80EE, because you took loan more than prescribed limit. (25 Lacs).
sir,
me and my wife had taken a joint loan of 29 lakhs, the property value is around 37 lakhs. We(me and my wife) have a re-payment agreement of 60:40 and this is the first property for both of us. Can we avail tax exemption under section 80EE. If so then what is the procedure.
Thanks and Regards
Arijit
Anand Gajakos Sir, Allotment of house is also considered as under construction house till completion of construction & when you will get certificate of completion.In this case you are not eligible to get deduction U/s 24(b)(upto completion) & 80EE.
Manoj Nay Ir Sir,Benefit of this section available for acquisition of House Property not for construction.
Can i avail 80EE benefit for the load taken for the purpose buying plot for house contraction. Its SBI reality loan and house construction alread completed.
Please advise.
Thank You
Manoj
I have purchased a flat with SBI home loan of 40,00000 Rs possession of the flat is in march 2015
I m paying EMI of Rs 39000 from April 2014
Can I get home loan tax benefit during this financial year and how much
Sanket Sir, Yes you can invest Rs.1 lac in PPF A/c. but according to me you should Invest in more schemes not only in PPF . If you asked for rent receipt by your employer then you should make any adjustment for rent receipts.
Anand Patole Sir, Deduction U/s 80EE is a separate deduction for interest on home loan(Max. 1 Lac) ,it is not related with 80C.
Bharathi Sir, Any property must not be registered on your name prior to the date of sanction of the loan.
I had existing property bought 5 years ago. I have bought a new flat costing 28 Lakhs in April’14. I Loan had taken a loan of Rs 25.47 lakh.(including value of Life Insurance & House Insurance & Morgate Charges ) The loan was sanctioned and disbursed in April 2014.
My queries
1) Can I avail benefit U/s 80C for principal amount repayment.
2) Upto what amount I can avail rebate under Sec 24 of IT Act.
3) Can I avail benefit U/s 80EE for interest repayment.
sir,
me and my wife had taken a joint loan from ban of maharastra in april 2013 which amounted to be 29 lakh approx my property is under construction property i had paid my 20% share demand for next part has come in april2014 can u suggest how to minimise my tax this under construction property will take atleast 3yrs to complete should i pay more emi to get deducation under 80c or pay emi acc to demand as it comes thnks
hi, suppose i need to make investment of 1,00,000 to avoid giving tax to govt. HRA is part of my salary component. is it ok if i put entire 1,00,000 in PPF account ? so that i dont have to submit rent receipts and all. will i get HRA component as it is ? or still tax will be charge on HRA ? pls note i only need to invest 1,00,000 rs which i have put in PPF.
this deduction including in 100000/- limit u/s 80c.if interest amt 70000/- & lic pf amt 60000/- than total amt Rs 130000/- deduction allowed.
Separate 80EE Deduction amount Allowed limit of Rs 100000/- or 150000/- in year
Hi,
I have availed loan for 23L and I am fully eligible for 80EE as per criteria. I have proof for rest of the criteria except First time buyer.Could you please clarify me how do I provide proof that I am a first time home buyer?
Thanks in advance.
Vijay Sir, Yes you can claim interest deduction U/s 80EE of Rs.69000/- in addition to the 1,50,000/-
2). Your wife can claim only when-
a). She has other source of income &
b). She is also co-owner & co-borrower
Niel_N Sir, 1). Yes, you can avail the benefits u/s 80C for the principal amount.
2). For self occupied property you can get deduction U/s 24(b) Max.1,50,000/- (Non Self Occupied –No Limit)
3). U/s 80EE you are not able to get because you have taken loan more than Limit (25 lacs) & other reason is that this is your second house property.
Jayant Sir, As per my view you are not able to get because according to provision, on the date of sanction of loan individual does not have any own residential house property but you purchased house in 2012.It is just transfer of loan from one bank to other in the f.y. 2013-14.
I had existing property bought 8 years ago. I have bought a new flat costing 30 Lakhs in Feb’14. I had taken a loan of Rs 25.25 lakh. The loan was sanctioned and disbursed in January 2014.
My queries
1) Can I avail benefit U/s 80C for principal amount repayment.
2) Upto what amount I can avail rebate under Sec 24 of IT Act.
3) Can I avail benefit U/s 80EE for interest repayment.
Hello Sir,
I have availed the Loan from ICICI Bank and I’m the First time buyer.
My Loan amt of 23 Lakhs (CO-Owner My Wife) was sanctioned on Mar-14 along with possission and The First EMI is Due in Apr-14.
Total Principal 66,000 and Intrest 2,19,000/-
Under 80C Principal :66,000
Under Section 24 (Income / Loss / Others) :1,50,000
Can you please answer my below queries.
1) Can I show the Addionnal Amt of 69,000 ?
2) Can this be cliamed by my wife ?
Hi Lakesh,
I bought flat in may 2012 with help of HDFC’s loan of 19 lakh 40 thousands.
I recently transferred loan from HDFC to SBI.
SBI loan of 19 lakhs is sanctioned before 31 Mar 2014.
This is my first and only house.
can I claim tax benifit under section 80EE.
Chintan Sir. You are not able to get interest & loan processing fees deductions u/s 80EE, because you took loan for the purpose of construction.
Hey Lakesh,
I got loan disbursed in AY. 14-15.
But the property is “under-construction” and will get occupation in AY. 15-16.
Queries:
a)Can I claim any interest deduction under 80EE for AY. 14-15?
b)Can I claim loan processing fees under 80EE for AY. 14-15?
Amar Ante Sir,section 80EE does not apply on loan taken for construction of property.
Murali Sir,in response of your query-
1). You can get deductions u/s 24(b), 80C and 80EE. &
2). You also able to avail the benefit of HRA at a same time.