FM Nirmala Sitharam has laid a vision of “Affordable Housing” in Budget 2019. This has brought a lot of changes in Income from House Property. One of them being Introduction of section 80EEA in budget 2019, that allows a deduction on home loan interest. A lot of emphases were laid on it in Budget 2020 as well. Loans sanctioned on and after FY 19-20 can be claimed as deduction u/s 80EEA.
Who can Claim Deduction Under Section 80EEA?
The deduction u/s 80EEA is only available to individuals. Additionally, it is important to meet the criteria listed below in order to claim deduction under this section:
- The stamp duty value of residential houses shall be up to INR 45 lakh.
- Only individual taxpayers can claim this deduction and not HUFs.
- The loan is taken from a financial institution.
- The loan has been sanctioned between 01-04-2019 to 31-03-2020.
- Assessee is not claiming any deduction under section 80EE.
- The assessee owns no residential house property on the date of sanction of loan.
The exemption limit of this deduction is INR 1,50,000. Deduction under Section 24 can also be claimed along with 80EEA which can give taxpayers a total benefit up to INR 350,000.
Difference between Section 80EE and 80EEA
|Sr. No.||Parameter||Under Section 80EE||Under Section 80EEA|
|1.||Elibility||All Taxpayers||Only Individual Taxpayers|
|2.||Deduction Amount||INR 50,000||INR 1,50,000|
|3.||Applicability of Section 24||Section 24 can be claimed to provide exemptions up to INR 2,50,000||Section 24 can be claimed to provide exemptions up to INR 3,50,000|
|4.||Date of Loan Sanctioned||Taxpayers get the deduction if their loans are sanctioned during the FY 16-17||Taxpayers get the deduction if their loans are sanctioned on and after FY 19-20|
|5.||Stamp Duty||Loan Amount should not exceed INR 35 Lakhs||Stamp duty cost should not exceed INR 45 Lakhs|
|6.||Condition||The taxpayer has to be a first-time home-buyer||The taxpayer has to be a first time home buyer and shouldn’t have taken any deductions under 80EE|
ITR Form Applicable for Section 80EEA
The taxpayer can claim deductions u/s 80EEA while filing ITR if all the above-mentioned conditions are full-filled. Individuals/HUFs can claim 80EEA in any of the ITR forms, i.e, ITR 1, ITR 2, ITR 3, and ITR 4 depending upon their income sources. The due date for filing ITR is 31st July of the next FY if the tax audit is not applicable.
Following are the supporting documents to claim 80EEA:
- Form 16
- Home Loan Certificate from the bank
- Bank Account Statement through which the EMI is paid
- Home Loan Sanction letter
The taxpayer can claim deduction under this section if he/she has actually made payment of a home loan. You can claim the deduction even if it is not present in your form 16, provided, you have supporting documents with you.
No, taxpayers cannot claim deduction u/s 80EEA if they are claiming section 80EE.
Yes, deduction under both sections can be claimed simultaneously subject to other conditions.
Deduction u/s 80EEA is available subject to given below conditions :
– The stamp duty value of residential houses shall be up to Rs. 45 lakh.
– The deduction can be claimed only by individual taxpayers.
– The loan is taken from a financial institution.
– The loan has been sanctioned between 01-04-2019 to 31-03-2020.
– Assessee is not claiming any deduction under section 80EE.
– The assessee owns no residential house property on the date of sanction of loan.
Before section 80EEA, taxpayers used to claim 80EE. If the loan is sanctioned during FY 16-17 you get deduction u/s 80EE. Under this, taxpayers can avail income tax benefits of Interest on home loans taken for a residential house. These benefits have a maximum exemption limit of Rs. 50,000 per FY. The exemption can be availed by all types of taxpayers until they repay their loan amount.