Section 80EE-An additional income tax deduction for home loan interest|Indeed, the fortunes of
buying your first home are different. Especially after going through the daunting process that begins -
finding a home that fits your budget and meets your needs - to the more tiring steps of getting a home
loan.
However, this can be beneficial for a
first-time home loan buyer.
A tax deduction is available under section 80EE for interest paid on loans (received by a first-time taxpayer) for the purpose of purchasing a residential property.
You (the taxpayer) can claim a deduction of up to Rs.50, 000/- per tax year under this section. A discount may be required before paying off the loan in full.
You may also like- Download and Prepare at a time 50 Employees Form 16 Part B for the Financial Year 2022-23 and Assessment Year 2023-24
What is Income Tax 80EE?
Section 80EE provides tax benefits on home loan proceeds for first-time home buyers on the following events:
• This discount is available only if the purchase price of the property is less than 50 million rubles and the loan amount is less than 35 Lakh.
Credit must be approved from April 1, 2016, to March 31, 2017.
• The benefit of this tax deduction will be available at the time of loan repayment.
• For the financial year (F.Y.) 2016-17, this exemption will be available to eligible taxpayers.
Below is a simplified version of the
above section on home loan tax deductions:
Personal Discount Amount (Rs)
Non-autonomous property Non-autonomous property
Section 24(B) (Interest) Max Rs.2, 00,000/-
Section 80C (Main) 1, 50,000
Section 80EE (Percentage) 50,000
Conditions for claiming tax benefits under section 80EE
The conditions for claiming exemption under section 80EE are as follows:
• Tax deductions under Section EE are available only for the taxpayer's first home purchase.
• Available only if the market value of the house is less than Rs.50, 00,000.
• Tax deduction under this section is available only if the amount taken as a home loan does not exceed Rs.35, 00,000/-.
Credit must be approved from April 1, 2016, to March 31, 2017.
Only mortgage interest is eligible for tax.
• Approval of the mortgage loan taken out by the taxpayer from a recognized financial institution such as a housing finance company, bank, or non-banking finance company is mandatory.
The taxpayer is expected to submit the bank statement disclosing the amount of interest paid and the principal amount paid and the amount of interest paid under section 80EE to claim tax deduction.
• A taxpayer availing of this exemption cannot own another house on the date of approval of the loan.
A tax deduction is available only if the home loan is taken for residential purposes and not for commercial purposes.
• Tax benefits under section 80EE are based on per person and not per person. Therefore, if a taxpayer buys a house jointly and takes a joint home loan, each person repaying the loan amount can claim the deduction separately.
• Once the Home Loan Advantage deductions are declared, the income balance of the person will be taxed at the income tax rates.
You may also like- Download and Prepare at a time 50 Employees Form 16 Part A&B for the Financial Year 2022-23 and Assessment Year 2023-24
What are the criteria for claiming tax
deductions under section 80EE?
Following are the deductions claimed under section 80EE:
• Under this section, individual taxpayers can claim tax relief individually or jointly.
If a person and their partner buy a house at the same time and both repay the loan, both are eligible for this tax deduction.
• Only first-time home buyers are eligible for tax deduction under section 80EE. This means that the taxpayer should not own any residential property at the time the loan is approved.
The taxpayer must have obtained the loan from a financial institution or bank.
• Tax exemption under section 80EE is not on the person but on the property.
• Maximum Limit Rs. 50, 00/-
• Under Section 24, this tax deduction is more than Rs.2, 00,000/-.
• Taxpayer may be required regardless of whether the taxpayer lives in the home or rents it to someone else.
• For example - If you own a house in Pune, you can claim this deduction if you live in a rented property. or in Mumbai.
How to claim tax deduction under section
80EE?
To find out how much tax credit you can claim under section 80EE:
• Calculate the total amount of interest paid on the home loan in one financial year Max Rs.2 Lakh.
How do I claim tax deductions under
section 80EE and section 24?
How to fit for both
exemption U/s 80EE and 24B
• First, use the Section 24 deductible limit in Section 2.
• Then an additional tax deduction of Rs 50,000 is claimed under section 80EE.
The result appears that a total amount of deduction of Rs.2, 50,000/- can be claimed.
What month is between section 80EE and section 80EEA is there
The new Section 80 EEE in the Union Budget increases the tax deduction on interest deduction for home loans for affordable housing to Rs 1, 50,000 from April 1, 2019, to March 31, 2020. Must be a first-time home buyer. Eligible for tax under section 80EE.
