Section 80EE came into force from the financial year 2013-14. It was available only for 2 years, FY 2013-14 and FY 2014-15. Earlier the deduction allowed was limited to a maximum of Rs 1 lakh in aggregate and was available for only 2 financial years.
Section 80EEhas been reintroduced, with effect from the financial year 2016-17 (AY 2017-18). Now a deduction of up to Rs 50,000 per annum is allowed till the loan is repaid. The section does not specify whether you need to be a resident to be able to claim this benefit. Hence it can be concluded that both resident and non-resident Indians can claim this deduction.
The section also does not specify whether this house should be self-occupied or not to claim the deduction. So, borrowers living in rented houses can also claim this deduction.
Further, the deduction can be claimed only for the purchase of a house by individuals jointly or singly. If a person jointly owns the house with the spouse and both of them are paying the installments of the loan, then in that case both can claim this deduction.
Features Of The 80EE Deduction
Qualification criteria- The allowance/deduction under this section is accessible just to people. This implies, on the off chance that you are a HUF, AOP, an organization, or some other sort of taxpayer, you can’t claim any advantage under this section.
Limit of Amount- This deduction (up to Rs. 50,000) is well beyond the Rs 2 lakh limit under Section 24 of the income tax act.
Different conditions- To guarantee this deduction, you ought not to own some other house property on the date of the authorization of loan from a financial institution.
Also, read| Section 80 TTA
Conditions To Be Met For Claiming 80EE Deduction
- Estimation of the house ought to be Rs 50 lakhs or less
- The loan taken for the house should be Rs 35 lakhs or less
- The loan should be sanctioned by a financial institution or from a Housing Finance Company.
- Important to note that the loan must be sanctioned between 1/4/2021 to 31/3/2022.
- Keep in mind that on the sanction of loan no other house property must be owned by you especially.
Section 80EE And Section 24
If you can fulfill the conditions of both Section 24 and Section 80EE of the Income Tax Act, be fast to claim the advantages.
- First, exhaust your deductible limit under section 24, which is Rs 2 lakh.
- Then proceed to claim additional benefits under section 80EE.
Hence, this deduction is in addition to the limit of Rs 2 lakh allowed under section 24.
Section 80EE And Section 80EEA
Union budge 2019 has acquainted a new section 80EEA with expanding the tax benefits of the interest deduction up to Rs 1,50,000 for housing loans taken for reasonable housing during the time frame 1 April 2019 to 31 March 2020. The individual taxpayer should be a first-home purchaser and should not be qualified for deduction under section 80EE.
FAQ Of Section 80 EE- Additional Deduction For Interest On Home Loan
Can I claim the benefits of section 80EE if the home loan is taken now?
The exemption under section 80EE is available only to those individual borrowers whose loan was sanctioned between 1st April 2016 and 31st March 2017.
If in case another residential house property is purchased in the year following the purchase of the first house, can the deduction under section 80EE continue to be claimed?
As per the law, persons purchasing residential house property for the first time are allowed a deduction under section 80EE. They should not have any other house as on the date of sanction of loan from the financial institution. Therefore, if the second house is purchased later, the deduction under section 80EE can continue to be claimed on the first house.
Can the borrower under section 80 EE claim deduction if he is not living in the house for which benefit is availed?
To claim deduction under section 80EE, one need not live in the same property on which profit is received. The borrower can claim the deduction even if he lives in a rented house.
What is the difference between section 80EE and section 24(b) of the Income Tax Act?
Under section 24(b), a deduction of Rs 2 lakh is allowed for self-occupied property, and the entire interest is deductible for the let-out property. However, under section 80EE, an additional deduction of Rs 50,000 is allowed only after the limit of section 24(b) is exhausted. It can be availed by first-time home buyers and financial institutions by taking loans sanctioned between 1.04.2016 and 31st March 2017.