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-: [email protected])
Click Here to Read Other Articles of Lakesh Kumar
(Article was First Published on 02.07.2018)
Author Bio
I HAVE TAKEN HOUSING LOAN IN 2008 (FOR RS. 8 LAKH), FROM MY DEPARTMENT. PRESENTLY PAYING ONLY PRINCIPAL. CAN I CLAIM REBATE/DEDUCTION ON ACCUMULATED INTEREST. I HAD NOT CLAIMED ANYTHING TILL DATE (UNDER THIS CATEGORY). IF YES, I HAD TO FILE REVISED RETURN, TO GET REFUND OR I CAN CLAIM THE SAME IN THIS RETURN (TOTAL INTEREST ACCUMULATED FROM APR-13 TO MAR-15 IS RS. 40,000/-)
hi,
I would like to take Home loan from Chit Funds Ltd. Could you please let me know whether I am eligible for Tax deduction. If I am eligible what are the proofs required from Chit Funds Ltd.
I HAVE TAKEN HOUSING LOAN ON JAN-2014.HB interest for FY (2013-2014) was Rs.55000 which has been claimed U/s 80EE. Total interest for the FY-(2014-2015),Comes around 2,40,000. I have claimed HBL Int. 200000 in section 24. Can I claimed remaining Rs 40,000 in section 80EE .
Madhu, No you are not eligible.
As per the 80EE clause, I’m meeting all the clauses except that my loan account is Rs. 25,51,000. (basically just 51K more). Can I claim the benefit while filing the taxes in the assessment year 2015-16 ?
Durgesh Sir, yes you can avail whole interest if property is on rent without any limit.If it is self occupied then you can claim upto rs. 2 lakh.
Pre-Construction interest can be claimed in five equal installments.
Sir,
my house construction is complete and get possession on Feb 14. FYI home loan interest is rs 300000. Can I avail 3 lac u/s 24. How can I avail interest paid under construction period.
Respected sir, i had taken contruction loan from the bank . my wife & father are coapplicants in loan but i am the only owner of the plot which is mortage to bank against loan grantee. My father is retiered and wife is house wife. I am govt employee. I am holy soly responsible for repayment of loan. I want to clain 100% of repayment of loan ( interest + principle ) in my return. But clark of my ddo is not agreed and giving me half banifit in my 16 no. Form. He said there are two or three candidates in loan so benifits in rebate should be devided accordingly. I think he is wrong and some action should be done against him. Please suggest me weighter he is wrong or not and what can i do to correcting my 16 no. Form . Thanks
Abhijit Sir, value of house property exceeds 40 lakh (including plot) so you are not eligible.
mohit Sir, you are not eligible.
Yogesh, Sir interest on housing loan can be avail upto 2 lakh. So you can claim interest u/s 24(b) instead of section 80EE
S K Bhatt, sir, untill house is fully constructed you can not get deduction. when construction will complete then pre construction interest can be claimed as deduction in five equal installments u/s 24(b) and principal amount U/s 80C
Abhijit Sir, possession is required to get benefits.
sir,
i got loan of 10,00,000/- for house. and this house is under construction.i have paid interest 84000/- + principle amount 16000/- in finacial year 2014-15.now i want to know that how can i get rebate in tax ?
Dear Lakesh,
I’m an Employee in a private sector. I’ve a query that, interest on Housing Loan is been considered upto 136000/- in Form No. 16. But, in e-filing, it does consider upto 100000/- even after filling 136000/- figure in the 80EE column. Please suggest, what will be the solution for this???
Thank you!
Hi Lakesh,
In my case house loan amount 24.9 Lac, sanctioned in May/2013 and house value less than 40 lac. But ‘property’ value would exceed 40 lac if land value is added.
Do I qualify for 80EE deduction?
I have not claimed anything in AY 14-15. Can I claim the full 1,00,000 in current AY 15-16?
Thanks
Abhijit
Sir!
can i fill housing loan installment amount in our ITR-1? if yes then where?
hi,
I have take home loan under construction link plan will i still get the tax benifit of one lakh under 80EE
Sir very nice article. Please Keep on writing such articles. wish you all the best for your future. 🙂
Sir,
I have a query, can i claim this tax benefit even if i haven’t got the possession yet ?
Amol Jadhav Sir, Benefits of this section available only opto A.Y 2015-16.After this A.Y. you are not able to get deduction
Hi, I have a query on 80EE. I am fully satisfying all the rules of 80EE, however have a query : Example- Assessee has taken a loan for the purpose of residential house property & interest payable on loan Rs. 90000/- for the A.Y.2014-15.In this case assessee can claim deduction 90000/- in A.Y.2014-15 and other remaining balance i.e. Rs. 10,000/- ,can claim in A.Y.2015-16 Query: If 80EE was not claimed in Apri 2014-Mar 2015, can full 1 lac amount be claimed in Next year Apr 2015-Mar 2016 ?
Suganya mam, your husband is not co-owner of the property, hence he is not eligible to claim interest deduction u/s 24b
Rajan Sir, you can claim interest U/s 24(b) only when you are also co-owner of the house property.So company views is right.
Dear Lakesh
This query is not with respect to 80 EE, but availing Deduction for the Interest paid on Loan taken from a Bank
I booked a Flat with a AWHO Project ( A Housing Society for Army Officers ,both serving & Retired ) coming up in Bangalore & I was allotted a flat, not specifically by Door No, which was under construction .
I applied for a loan for Rs. 50 Lakhs with my NRI son as co applicant & m loan was sanctioned in Dec 2010. 1st Instalment of loan was disbursed directly to AWHO on 11 Jan 2011. I strted paying EMIs from Feb 2011.
The construction in general was completed in April 2015 only and possession was given to me in April 2015.
How ever, the specific Flat with Door No was allotted to me in 2014,though the construction Was still going on.
The stipulation to avail pre construction interest amount paid says , one can avail the interest amount in 5 equal installments from the next financial years, provided the construction is completed in 3 years.
In my case , actual constuction was completed in Apr 2015, but the Specific Flat with Specific Door No was allotted in 2014 which is with in 3 years
Can I claim my pre construction Interest paid in 5 installments starting from FY 2014 -15.
Kindly Clarify.
Colonel Ramaswamy
up date to daly basis
Hi.
I am a co-borrower along with my mom of home loan for construction. Owner of the property is my mother. She is dependent on me and I am repaying the whole amount. How can i avail tax benefit? My company says I should be the owner or necessarily co-owner.
Hi,
I am a software professional and have a query on 80EE. I am fully satisfying all the rules of 80EE, however have a query :
Example- Assessee has taken a loan for the purpose of residential house property & interest payable on loan Rs. 90000/- for the A.Y.2014-15.In this case assessee can claim deduction 90000/- in A.Y.2014-15 and other remaining balance i.e. Rs. 10,000/- ,can claim in A.Y.2015-16
Query: If 80EE was not claimed in Apri 2014-Mar 2015, can full 1 lac amount be claimed in Next year Apr 2015-Mar 2016 ?
Regards
Manoj Tyagi
Selection criteria takes out majority of people. Value of 40L with loan less than 25 lacs is a difficult to have as most of the buyers go for max. 80% of the loan to value ie. 32 lacs for a property 40L. Also It is hard to find a property for 30 Lacs or below even in smaller towns.
Whether higher studies pursued from any foreign university is included in the definition of higher education given by section 80E of Income tax?
Sir,
I have taken house building loan from AFGIS (Air Force Group Insurance scheme) of Rs. 10 lakhs in the year 2011. My flat is under construction and likely to be handed over by pvt builder in Dec 15. Initially for 1 and 1/2 yrs I have paid pre-emi @ 2000/- pm and finally my EMI has been fixed Rs. 15166/- pm. I have also paid Income tax appx Rs. 1500/- pm till Nov 14. I am not aware that how and when I will get 80 EE benefits. I am still not aware that what I should do if I get my possession letter by Pvt builder regarding rebate of house loan. Pl advise me in details and what course of action I should adopt. I am serving in defence service.
Thanks, waiting for your valuable reply.
Hi,
I have purchased two adjacent houses. Both purchases are done on same day in 13-14.
For both properties I have two separate Housing loans sanctioned in 2013-2014.
Property including both is around 32.5 lac and loan sanctioned around 13.8 lac per property.
As condition the property should be 1st property for that person who wish to avail it i.e. he should not have another property prior,
so the question is – can I avail 80EE – 1 lac additional benefit? Is my properties are considered as 1st properties or 2nd properties?
Please let me know. I wanted to avail additional benefit of 1 lac this year.
Sir
i am working in Agriculture Department as a class 1 officer.HBA is taken both me&spouse.the repayment of loan is in my account only.she is not a tax payee and no need of income tax calculations.i claimed the entire amount principal amount Rs 50000/ and interest Rs 80000/for my income tax exception .But the tresary authorities saying only half of both principal and interest is admissible to me. please advice me whether the objection raised by the treasry is right
Regards B.venugopal
I have home loan in my name while i was working. Currently i’m not working and i included my Husband as Co Applicant in my home loan( But he is not Co owner of the property). And i have linked my Husband’s Salary account for debiting the EMI. Will my be eligible to claim the interest and Principal. I wants my husband to claim the tax benefit for this home loan, whats the procedure for this??
I buy a flat in rs.4003000 & home loan is 3000000
My principal is 146000 & intetrst is 266000
In which section l belong & by how much
dear sir
i taken loan 20 lac from may 2013 as per loan cerctifate my interest 1,75,801 pricipal 35,326(April 2013 – March 2014)
my loan and properity match as per section 80 EE conditions
pls advice what may i get tax benifits what i do persent(2014-2015) and next year (2015-2016)
gobinath n
i bought a house worth 2 crore. i borrowed 1.25 crore from the bank. Now I have a remaining balance of 85 lacs as home loan. i have a EMI of Rs 1,05,000 of which the interest is 75000 and the principal is 30,000.
the house is rented now and i get Rs 65,000 monthly as rent. could you explain as to how much of income tax am i supposed to pay.
Sir I have taken 2 appartments and availed loan from Sbi and Tata capital. can i avail Loan Intrest and Prilncipal for the above to in 2014-2015 TDS.
I have booked a flat and the construction of it is yet to complete. I got a home loan and started paying EMI from Oct 2011. As per section 24 of Income tax, I can only avail tax benefit on interest paid only if the construction is completed within 3 yrs of load borrowed. As you could see, I will be crossing this time period this March.
So my question is –
1. If I register my property next year .e. after 3 yrs of barrowing money, will I not be able to claim tax benefit under Section 24? If so, is it only applicable for next financial year or throughout the tenure of loan repayment
2. I am paying full EMI since Oct 2011. Will I be able to claim tax benefit on the interest & principal I paid before registration.
Dear Sir,
i have took a housing loan of 10 lakhs in sbi bank vizag and the house is under constuction , and i am presently staying in a rent house for 8000 per month , can i claim housing loan for it returns for the under constructions house and also as i am paying 12000 emi per month from last 2 years . kindly suggest
Hi,
Can you please let us know is it possible to get exemption for 80EE and U/S 24.
If I purchase one house i can get exemption U/S 80EE of Rs.100000 on interest then what about principal ….?
If i purchase one house and i will get exemption U/S 80EE of 100000 and is that possible that i can get exemption on U/S 24 of Rs.200000 on interest also ….?
If i purchase one more house and i wont get exemption U/S 80EE of 100000 and is that possible that i can get exemption on U/S 24 of Rs.200000 on interest also ….?
thank you,
Regards,
Akshay
my husband took house loan as govt employee.now he is in study leave without pay.as a govt employee only im paying the loan,can i show it in income tax
I just bought a home.But have taken 27 lakhs home loan and I am a first time buyer.Am I not eligible for tax benefits on it.As it is written that loan amount should be less then 25 lakhs.
I had taken a housing loan FROM UNION BANK OF INDIA and I am giving all EMIs from my account but the house is in the name of my father AND I am not having any immovable or movable property on my name .Can I get Tax rebtae on this housing loan, since I am a Central Govt. employee.
Sir,
I took loan on 01/06/2013.Amount is 15Lac and property value is 26lac.
This is my first property.In last financial year (2013-14) I have paid Rs/-84755 as interest amount . For this year (2014-15) I have paid interest around 1.5 lac.
I have got possession on 29 Oct 2014.Since I have no idea about 80EE that is why I have not done anything at the time of submitting my return it in last year .
Could you please guide me what I can do.
Thanks in advance.
Hi I purchased a house with help of HDFC home loan in October 2012. In october 2013, I transferred this loan to SBI. May I avail benefits of the section 80 EE for current year (financial year 2014-15) and (assessment year 2015-16). Please help.
I have purchased residential plot in secret 3 g NOIDA @25 lac and taken housing loan from Lichf 20 lac for the payment of installment to authority in year 2009. Can I entitled for it rebate on principal and interest. I m govt servent.
sir ,
I purchased the flat in the year 1999 and cleared the house loan in 2014. Now i am making income tax for the worth of 25000 p.a. if I will take any loan on existing flat for repairs and fixing of ward robe , can i get income tax exemption?
pl give advice to me
p.D.suresh
[email protected]
Sir,
I have purchased house for 34 lac. Loan sanctioned in May 2013. My loan amount is 27 lacs. For 2013 2014 IT i showed 1.5 lac for interest. For this year 2014 – 2015 can i show 2 lacs for interest as per the new budget?
Sir,
I took loan on 12/10/2013.AMount is below 25Lac and property value is 32lac.
This is my first property, For this year I have paide interest around 1.5 lac.
Can I claim this amount under 80EE my flat is under construction and will get on October 2015.
some one told me if this flat is under construction I can not claim under 80EE
Could you please guide me if I can claim.