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Bought residential house property loan?? Avail tax benefits on the interest portion on the house property loan under Section 80EE.
A first-time buyer of a home has to go through a daunting process that begins with searching for the right dream home that fits the budget and aspirations to the even more grueling steps of availing a home loan. The Income Tax, 1961, under Section 80EE, helps taxpayers to claim a deduction of up to Rs 50,000 per financial year. This benefit is on the interest paid on the home loan and is not part of Section 80C of the Income Tax Act 1961.
As per the announcement under Budget 2023, when calculating the capital gains tax on the sale of a residential property, the cost of acquisition (i.e., the original purchase price of the property) should not include any home loan interest that the seller claimed as an income tax deduction during the period they owned the property.
Section 80EE allows Income Tax Benefits on Interest on Home Loan to first-time buyers in the following events:-
The above sections connecting to tax benefits on home loans have been abridged under
| Particulars | Quantum of Deduction (Rs.) | |
|---|---|---|
| Self-Occupied Property | Non-Self Occupied Property | |
| Section 24 (interest) | 2,00,000 | No Limit |
| Section 80C (principal) | 1,50,000 | 1,50,000 |
| Section 80EE (interest) | 50,000 | 50,000 |
To be qualified for declaring 80EE deductions, a taxpayer must make certain of the points listed below:
Section 80EE and Section 24 of the Income Tax Act in India are two separate provisions that provide tax benefits related to home loans. Here's a breakdown of the differences between these two sections:
Section 24:
Section 80EE:
To discover how much one can claim the deduction, here is what requires to be performed:
Here's a step-by-step guide to help you claim the house loan interest in your ITR:
Tax benefits under section 80EE and section 24 for interest paid on the home loan can be claimed together to the maximum cumulative limit of up to Rs 2,50,000. Which can be bifurcated as under
| Section 24 | Upto Rs 2,00,000 |
| Section 80EE | Upto Rs 50,000 |
| Total Deduction | Upto Rs 2,50,000 |
Also, for availing the tax benefit under both these sections, you first need to use the limit available under section 24 and afterward avail the tax benefit additionally available under section 80EE.
Under the budget 2019, a new section 80EEA was introduced as per which the tax benefits of the interest deduction for housing loans were extended up to Rs 1,50,000 for affordable housing during the period 1 April 2019 to 31 March 2022. The condition behind this was the individual should be a first-home buyer and should not be entitled to a deduction under Section 80EE.
Home loan interest can be a big deduction on your taxes. But do you know how to claim it correctly? A tax professional can help you avoid mistakes and get the highest refund possible.
In this case, since the co-borrower is not a co-owner of the property, he cannot claim any tax exemption. The only solution to this is if your wife executes a sale deed or gift deed in your favor to include you as a co-owner of the property. To do this, she will need to take approval from the bank. Since you are a co-borrower, the bank should hopefully have no objections.
The benefit on the second house is not available under section 80EE.
The amount that can be claimed under section 80EE is Rs. 50000/- for A.Y. 2023-24 in respect of loans taken in FY 2016-17.
Section 80EE allows income tax benefits on the interest portion of the residential house property loan availed from any financial institution or a housing finance company. You can claim a deduction of up to Rs. 50,000 per financial year as per this section. You can continue to claim this deduction until you have fully repaid the loan.
Yes, You can claim a tax benefit under both section 24 and section 80EE in a single year. Tax deduction under Section 80EE of the Income Tax Act 1961, can be claimed by first-time home buyers for the amount they pay as interest on a home loan and the loan must be sanctioned between 01-04-2016 to 31-03-2017. The maximum deduction that can be claimed under this section is Rs. 50,000 during a financial year. The amount can be claimed over and beyond the deduction of Section 24 which is Rs. 2,00,000.
As per section 80EE of the Income Tax Act, the income tax deduction for interest on a home loan can be claimed only in respect of home loans taken for the acquisition of residential house property from any financial institution or a housing finance company. Hence, section 80EE is not applicable in the construction of a house.
This deduction is only available to individuals who do not own any other house property as of the date of loan sanction and the threshold limit for this deduction is Rs. 50,000
Section 80EE is only available to individuals, however, Section 24 applies to HUF also. Section 80EE is only for those who are first-time home buyers, but section 24 is applicable to all house properties.
