Section 80EEA : Deduction on Home Loan interest

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Fatema Rasiwala

Income from House Property
Income Source
Section 80EEA

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.

Deduction under section 80EEA is not allowed for Financial Year 2020-21 if the taxpayer opts for the new tax regime
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Deduction under section 80EEA is not allowed for Financial Year 2020-21 if the taxpayer opts for the new tax regime

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 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.

ITR for Salaried Individuals
CA Assisted Income Tax Return filing for individuals having salary, one house property & income from other sources.
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Difference between Section 80EE and 80EEA

Sr. No.ParameterUnder Section 80EEUnder Section 80EEA
1.ElibilityAll TaxpayersOnly Individual Taxpayers
2.Deduction AmountINR 50,000INR 1,50,000
3.Applicability of Section 24Section 24 can be claimed to provide exemptions up to INR 2,50,000Section 24 can be claimed to provide exemptions up to INR 3,50,000
4.Date of Loan SanctionedTaxpayers get the deduction if their loans are sanctioned during the FY 16-17Taxpayers get the deduction if their loans are sanctioned on and after FY 19-20
5.Stamp Duty Loan Amount should not exceed INR 35 LakhsStamp duty cost should not exceed INR 45 Lakhs
6.ConditionThe taxpayer has to be a first-time home-buyerThe taxpayer has to be a first time home buyer and shouldn’t have taken any deductions under 80EE
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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.

For FY 2019-20, due to COVID-19 the due date for filing ITR has been extended to 30th November 2020 for all taxpayer.
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For FY 2019-20, due to COVID-19 the due date for filing ITR has been extended to 30th November 2020 for all taxpayer.

Supporting Documents

Following are the supporting documents to claim 80EEA:

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.

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FAQs

Can I claim interest payment deduction on home loan u/s 80EE & 80EEA simultaneously?

No, taxpayers cannot claim deduction u/s 80EEA if they are claiming section 80EE.

Can I claim deduction u/s 24 & 80EEA simultaneously?

Yes, deduction under both sections can be claimed simultaneously subject to other conditions.

What are the conditions to claim deduction u/s 80EEA?

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.

What is section 80EE?

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.

  • Suman says:

    My home loan sanction period is February 2019 but sales deed happened on April 2019 and same date money disbursement happen …..I’m eligible for 80eea?

    • Hiral Vakil says:

      Hi Suman,

      A taxpayer is only eligible for 80EEA if the loan is sanctioned on or after 01/04/2019. Hence in your case, since loan was sanctioned before 01/04/2019 you will not be able to claim deduction u/s 80EEA.

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