Get Additional Rs 50,000 deduction under Section 80EE of the Income Tax Act09:37 AM 13 Jun
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
- Historical Pricing Information of the Projects Helps in Decision Making
- Residential Properties for Sale in Kokapet with Good Facilities
- Independent Houses for Sale in Hyderabad from 25 Lakhs to 50 Lakhs
- Property Sales increased 25% up in top 7 cities of India
- Gated Community Flats for Sale in Kukatpally with Good Infrastructure
- NRI’s Guide to Buying Property in India
- Newly Constructed Houses for sale in Hyderabad with comfortable facilities
- Apartments for Sale in Hyderabad below 80 Lakhs in Top Five Locations
- Buy a Best House in Hyderabad with Latest Project Monthly Updates