Finance
Act, 2016 has introduced deduction of
interest payable on
housing loan for first time home buyers taken from any
financial institution over and above the deduction allowed under section 24b.
Section 80EE has been amended for this purpose.
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The
deduction is allowed only to individuals, maximum limit of deduction is Rs. 50,000 and deduction
is available from financial year 2016-17 on wards. Such deduction is allowed
till such loan is repaid.
There is
no limit on interest deduction under section 24b for rented properties,
therefore this section benefits only the persons who has taken loan on self
occupied properties.
Deduction
under this section is allowed only if following conditions are satisfied –
(i)the
loan has been sanctioned by the financial institution between 1st April 2016 to
31st March 2017.
(ii)the
amount of loan sanctioned for
acquisition of the residential house property does not exceed Rs. 35 lakhs.
(iii)
the value of residential house property
does not exceed Rs. 50 lakhs.
(iv)
the assessee does not own any residential house property on the date of
sanction of loan.
The
deduction is allowed over and above deduction under section 24b. Assessee can
not take deduction under both the sections.
