What is Section 80EE?
Section 80EE is a provision under the Indian Income Tax Act that allows first-time homebuyers to claim an additional deduction on the interest paid on their home loan. This deduction is in addition to the deduction available under Section 24 of the Income Tax Act.
This section was introduced in the Union Budget of 2013-14 to promote home ownership among first-time homebuyers. The deduction under this section is available for the interest paid on a home loan taken by a first-time homebuyer for the purchase of a residential property. The maximum deduction available under this section is Rs. 50,000 per financial year.
To claim the deduction under Section 80EE, the following conditions must be met:
• The taxpayer must be a first-time homebuyer
• The home loan must be taken between April 1, 2013, and March 31, 2017
• The loan amount should not exceed Rs. 35 lakhs
• The value of the property should not exceed Rs. 50 lakhs
• The taxpayer should not own any other residential property on the date of sanction of the home loan
It is important to note that if the taxpayer is claiming deduction under this section, they cannot claim deduction under Section 24 of the Income Tax Act. The deduction under Section 80EE is available only for two financial years - the year in which the interest is paid and the subsequent year.
Section 80EE income tax deduction on home loans
Borrowers taking home loans from banks and non-banking finance companies such as Bajaj Housing Finance Limited, can take advantage of income tax deduction under Section 80EE, to avail home loan tax benefits. For first time home buyers, Section 80EE of the Income Tax Act allows these individuals to claim an additional Rs. 50,000 deduction on the home loan interest repaid in a financial year.
The borrower can continue to claim the deduction until they have repaid the entire loan. Further, this deduction under Section 80EE is available only to individuals. Therefore, a company, AOP, HUF, or other kinds of taxpayers cannot claim any benefit under this section. Additionally, there is no requirement for the house to be self-occupied for claiming home loan tax benefit.
The borrower can continue to claim the deduction until they have repaid the entire loan. Further, this deduction under Section 80EE is available only to individuals. Therefore, a company, AOP, HUF, or other kinds of taxpayers cannot claim any benefit under this section. Additionally, there is no requirement for the house to be self-occupied for claiming home loan tax benefit.
