Log In
Sign Up
Section 80EEA Deduction on the Home Loan Interest
Blogs Income tax (IT)

Section 80EEA : Deduction on the Home Loan Interest

Section 80EEA: A Summary of Home Loan Interest Deduction

In this post, we will discuss the deduction under Section 80EEA of Income Tax. let’s look at each section in detail:

What is a TDS Certificate?

The interest on a house loan can be deducted under Section 80EEA. In addition, the taken-out loan should have been used to purchase a residence. In this section, we do not discuss the construction of houses for residential use. According to section 80EEA, a deduction of up to RS. 150,000 is allowed per fiscal year. It is possible to claim a deduction under this section until the loan is fully repaid.

How to claim deduction u/s 80EEA?

There are certain conditions to avail deduction u/s 80EEA:
  • The only purpose of a housing loan is to purchase a residential property. 
  • The loan should be taken from a “financial Institution”.
  • He should be a first-time home buyer. He should not own any house property on the date of sanction of loan.
  • The “stamp duty value” of the house should be Rs. 45 lakh or less.
  • The sanction of the loan should be between 01-04-2019 to 31-03-2020.
  • Assessee is not claiming any deduction under section 80EE.
There is one additional condition on “carpet area”:
  • The carpet area of the property should not exceed 60 sq.m (645 sq.ft) in metropolitan cities which includes Bengaluru, Chennai, Delhi NCR (limited to Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad, Faridabad), Hyderabad, Kolkata, and Mumbai ( whole of Mumbai Metropolitan Region).
  • It should not be above 90 sq.m (968 sq.ft) in cities or towns other than metropolitan cities.
  • This is applicable for affordable housing projects approved on or after 1 September 2019.
Section 80EEA does not specify if you need to be a Resident to claim this benefit. Therefore, both Resident and Non-Resident Indians can claim it. Section 80EEA also does not specify if the residential house should be self-occupied to claim this benefit. So, people living in rented houses can also claim it. Individuals who purchase the house jointly or singly can claim this deduction. If a person jointly owns the house with a spouse, and both are paying the loan, then both of them can claim this deduction.

Note:

What is a “Financial Institution” in 80EEA?
  • A banking company to which the Banking Regulation Act applies, or
  • Any banking institution referred to in Section 51 of that Act or
  • A housing finance company
What is “Stamp Duty Value” in 80EEA? Value adopted/assessed/assessable by:
  • any authority of the Central Government or
  • a State Government
for the purpose of payment of stamp duty in respect of the immovable property. What is the “carpet area” in 80EEA? Value adopted/assessed/assessable by:
  • any authority of the Central Government or
  • a State Government
for the purpose of payment of stamp duty in respect of the immovable property.

Difference between Section 80EEA and Section 80EE

                Section 80EEA                    Section 80EE
House should have a stamp duty value of at least Rs. 45 lakh.A home should not cost more than Rs. 50 lakh.
The loan should be sanctioned between 01-April-2019 and 31-March-2020The loan should be approved between 1 April 2016 and 31 March 2017.
The maximum deduction allowable is Rs. 1,50,000/-.The maximum allowable deduction is Rs. 50,000/-.
The value of land has no limits.The value of the land should not exceed Rs. 35 lakh.

Difference between Section 80EEA and Section 24

            Section 80 EEA                   Section 24
The 80EEA does not require possession, so you can claim an exemption as soon as you begin making interest payments.To claim the deduction under Section 24, you must have possession of your home.
Section – 80 EEA only permits house loans from banks and financial companies.If the loan is taken from a friend or relative and interest is paid to them, they are also exempt under section 24.
The maximum allowable deduction is Rs. 1,50,000/-.The maximum allowable deduction is Rs. 2,00,000/-.
Conditions for claiming the deduction:  
  • Stamp duty on a house worth up to Rs. 45 lakh
  • The assessee does not own any residential property.
  • Loan approved from April 1, 2019 to March 31, 2020
There are no such criteria.

FAQ

1, Can I deduct interest payments on a house loan under sections 80EE and 80EEA at the same time?

Ans:  No, one of the prerequisites for claiming deduction under Section 80EEA is that you are not claiming deduction under Section 80EE.

2, What evidence must I provide to my employer when filing Form 12BB?

Ans: Bank interest certificates can be given to the employer.

3, Can I deduct interest payments on an electric vehicle loan under Section 80EEA as well?

Ans: No, the 80EEA offers a deduction for home loan interest payments. The interest payment on a car loan is deductible under section 80EEB.

4, Can I claim deductions under sections 24 and 80EEA at the same time?

Ans: Yes, deductions under both provisions can be claimed at the same time, subject to certain conditions.

5, How many years is the 80EEA deduction available?

Ans: Deduction under Section 80EEA may be claimed until the house loan is paid off.

And with that, we end our discussion on  the deduction under Section 80EEA of Income Tax. If you have any questions, drop them in the comment section below.

Like
Share

Related Posts

Blogs Payroll

Blogs Goods and service Tax (GST)

Blogs Tax Deducted at Source (TDS)