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 was laid on it in Budget 2020 as well. Loans sanctioned on and after FY 19-20 can be claimed as deduction u/s 80EEA.

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What is the deduction under section 80EEA?

Section 80EEA is introduced so that individuals can claim deduction on Interest paid by them on home loans taken for a residential house. Following are the conditions for claiming Section 80EEA:

The exemption limit of this deduction is Rs. 1,50,000. Deduction under Section 24 can also be claimed along with 80EEA which can give taxpayers a total benefit up to Rs. 350,000.

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Difference between Section 80EE and 80EEA

Sr. No. Parameter Under Section 80EE Under section 80EEA
1. Eligibility All taxpayers Only Individual taxpayers 
2. Deduction amount Rs. 50,000 Rs. 150,000
3. Applicability of section 24 Section 24 can be claimed to provide exemptions up to Rs. 250,000 Section 24 can be claimed to provide exemptions up to Rs. 350,000
4. Date of Loan sanctioned Taxpayers get the deduction if their loans are sanctioned during 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 Rs. 35 Lakhs Stamp duty cost should not exceed Rs. 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

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.

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