In this article, we look at how you can claim tax deduction under Section 80EE of the Income Tax Act.
What is Section 80EE?
Section 80EE of the Income Tax Act allows additional tax benefits to first-time home buyers.
You can deduct interest paid on the home loan equal to Rs 50,000 every year from your taxable income till you repay the loan.
Who Can Claim Section 80EE Deduction?
Any individual taxpayer, both resident and NRI (Non-Residents) can claim the deduction.
You cannot claim this deduction if you are a Hindu Undivided Family (HUF), company, or any other Association of Persons (AOP).
The following conditions must be satisfied to claim deduction under Section 80EE:
- You must take a loan from a bank, financial institution or housing finance company between April 1, 2016, and March 31, 2017.
- The loan amount should be lesser than Rs 35 lakhs.
- The value of the residential property on which you take a loan should not exceed Rs 50 lakhs.
- The buyer should not own any other residential property at the time when the bank sanctions the loan.
How is it different from Section 24 of the Income Tax Act?
Section 24 of the Income Tax provides relief in the form of deduction to home buyers.
Every taxpayer who takes a loan to buy a house can deduct up to Rs 2 lakhs from his taxable income in every financial year.
For example, if he pays Rs 1,67,000 as interest on home loan for the financial year, he can only claim Rs 1,67,000 as a deduction as it is lower than Rs 2,00,000.
The maximum deduction available under this section is Rs 2,00,000.
Section 80EE and Section 24
Section 80EE was introduced in FY 2013-14, and the total deduction allowed was only Rs.1.00 lakh for the two financial years (FY) 2013-14 and FY 2014-15.
A new deduction was introduced during the FY 2016-17 (AY 2017-18). The amount of deduction is changed to Rs 50,000 per year starting from FY 2016-17 till you repay the loan.
Log in to www.propertyadviser.in to know more about tax provisions and deductions applicable to home buyers.
Don’t miss our latest real estate news.
By: Shailaja K
Subscribe to Our NewsletterGet Notified About Latest News
- How To Calculate Property Registration Charges & Stamp Duty In Hyderabad
- Importance Of GHMC Property Tax For Hyderabad Residential Properties
- GHMC Building Permission Charges And Procedure In Hyderabad
- Best Real Estate Investment Options In Hyderabad Telangana
- Latest Property & Land Rates In Hyderabad 2018
- Steps To Make GHMC Property Tax Online Payment In Hyderabad
- RERA And Its Rules In Telangana
- Stamp Duty And Registration Charges In Hyderabad
- Procedure To Get Encumbrance Certificate Through Online In Telangana
- Spacious but Affordable Residential Properties for Sale in Sainikpuri
- New Properties in Alwal with Stylish and Quality Facilities
- Choose The Right Colors According To Vastu For Happy Home
- The Most Important Vastu Factors To Be Considered While Buying A Home
- Innovative Storage Solutions For Your Home
- 20 Vastu Tips to Invite Health and Wealth in 2019
- 2BHK /3BHK Luxurious Flats for Sale in Nagole, Hyderabad
- Spacious 2BHK Apartments For Sale In Kukatpally Below 50 Lakhs
- Difference between Interior Design and Interior Decoration