Section 80EEA Deduction in respect of Interest paid on Loan Taken for Acquisition of Residential House Property (Affordable Housing)

{Sec. 80EEA as introduced by Finance Act, 2019.}

Q 1. Who is eligible to get benefit under this Section 80EEA?

Ans: An Individual who has taken a Loan for acquisition of residential house property from any Financial Institution.

Q 2. What is the benefit accruing to the Eligible Assessee under Section 80EEA?

Ans:Interest payable on such loan would qualify for deduction under this section.

Q 3. For what Period the benefit can be enjoyed?

Ans: The benefit of deduction under this section would be available from A.Y.2020-21 and subsequent assessment years till the repayment of loan continues.

Q 4. What is the Amount of deduction an Eligible Assesse can get under Section 80EEA?

Ans: The maximum deduction allowable is ₹150000/-. The deduction of up to ₹150000/- under section 80EEA is over and above the deduction available under section 24(b) in respect of interest payable on loan borrowed for acquisition of a residential house property.

Note: – In respect of self-occupied House Property, interest deduction under section 24(b) is restricted to ₹ 200000/-. In case of let out or deemed to be let out property, even though there is no limit under section 24(b), section 71(3A) restricts the amount of loss from house property to be set-off against any other head of income to ₹ 200000/-Accordingly, if interest payable in respect of acquisition of eligible house property is more than ₹ 200000/- the excess can be claimed as deduction under section 80EEA, subject to fulfillment of conditions.

Conditions to be fulfilled: –condition to be fulfilled

Note:

  • For claiming Interest deduction U/s.24, it is to note that the amount may be borrowed from either of the Financial Institution/from friends/from relatives.
  • But to get deduction under this section, one need to borrow from Financial Institutions only.

Example:

Mr. B incurred an Interest Expense of Rs. 250000/- on the amount borrowed for acquisition of Residential House Property. What are the deductions available to him for the A.Y 20-21 w.r.t Interest Expense?

Mr. B can claim deduction with respect to Interest Expense as follows:

  • 200000/- can be claimed in Sec.24(b)
  • Balance Rs.50000/- can be claimed in Sec.80EEA

Also Read-Deduction under section 80EEA of Income Tax Act

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5 Comments

  1. Goutham Kumar says:

    Can 80EEA be availed on Home loan transfers?? Like, I have taken loan in FY 2018-19 and in FY 2019-20 i have transferred loan to a new lender. Having satisfied all the other conditions can we avail the above 80EEA limit over and above u/s 24

    1. Santhosh Gupta Kethepalli says:

      Swapping of Loan will not amounts to granting a fresh loan in that F.Y. So you cannot claim deduction under this section for such Loan Swap irrespective whether other conditions are satisfied or not.

  2. Goutham Kumar says:

    Can 80EEA be availed on Home loan transfers?? Like, I have taken loan in FY 2018-19 and in FY 2019-20 i have transferred loan to a new lender. Having satisfied all the other conditions can we avail the above 80EEA limit over and above u/s 24!!!!!!

  3. Sutirtha says:

    Sir, My loan of Rs. 30 Lakh for a property of 36 Lakh was sanctioned by bank in June, 2018 and now I am paying almost Rs. 2,48,000 as home loan interest this year. I had availed Rs. 2 Lakh deduction u/s 24 previous year and same will be claimed this year, too. But can I avail any more deduction u/s 80EE or 80EEA?

    1. Santhosh Gupta Kethepalli says:

      Sir,
      Sec.80EE was reintroduced in F.Y 16-17 and your loan was sanctioned in June 2018 (I.e. F.Y 2018-19), so you cannot claim deduction u/s.80EE.
      Similarly you cannot claim deduction u/s.80EEA as your loan was not sanctioned in F.Y 19-20.

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