Arun Jaitley while declaring the Budget 2016 re-launched Section 80EE which presents for supplementary deduction of Rs. 50,000 for interest on home loan. This consideration would be covering and above the tax reduction of Rs. 2,00,000 below Section 24 and Rs. 1,50,000 below Section 80C.
| Particulars | Quantum of Deduction (Rs.) | |
| Self-Occupied Property | Non-Self Occupied Property | |
| Section 24 | 2,00,000 | No Limit |
| Section 80C | 1,50,000 | 1,50,000 |
| Section 80EE | 50,000 | 50,000 |
A taxpayer can declare deduction below Section 80EE at the time of registering tax repayments. To discover out how much one can declare as a deduction, here is what requires to be performed:
The characteristics of Section 80EE are as beneath:
A discount can be declared for interest on home loan below Section 24 of the Income Tax Act, 1961. The deadline under this segment is Rs. 2,00,000. This discount can only be demanded if the landlord or his or her family members live in the house property. The undivided interest shall be dismissed off as a reduction in case the home is on rent.
If an individual can satisfy the requirements of both the segments that are Section 80EE and Section 24, the individual can take benefits below the two. To do so, the person will first need to deplete the limit under Section 24 and then declare the additional compensation under section 80EE. Therefore, the reduction under Section 80EE is an enhancement to the boundary of Rs. 2,00,000, as below Section 24.
Yes, it is best if all co-borrowers take insurance while taking home loan as in the case of any untoward incident the other co- borrowers will get burdened with paying their share of the EMI too. A loan cover will take care of their EMIs. You can take insurance while completing the documentation formalities of your loan before disbursement. There are different kinds of loan insurance covers. While some safeguard your family or other co-borrowers from paying the outstanding loan amount, others safeguard you against damages to property or burglary. Based on your preferences you can choose an insurance policy.
In this case, since the co- borrower is not a co-owner of 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 favour to include you as a co- owner in the property. To do this, she will need to take approval from the bank. Since you are a co-borrower, the bank should hopeful have no objections.
You can rent your second home to other parties for up to two weeks (14 nights) within a year without having to report the resulting income to the IRS. The house is still considered a personal residence, and you can deduct mortgage interest and property taxes under the standard second-home rules. For any further assistance, you can contact our expert e-CA’s.
For under construction property before possession. According to Section 24 of the Income Tax Act, you can claim a deduction against the interest amount that you have paid on your residential property during the pre-construction period. Total allowable deduction stands capped at Rs. 2 lakh per year for self-occupied house.
Yes, you can avail of tax benefit on the second house by claiming it as self-occupied. If you own two houses, you can claim only one as self-occupied, while the other will be considered as let-out property. However, you will be allowed to deduct the interest on a home loan from the notional rent. To save tax, try investing in your spouse's name if he/she does not owns other residential property.
The amount that can be claimed under section 80EE is Rs. 50000/- for A.Y. 2019-20 onwards
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