Tax Deduction Under Section 80EE - Deduction for Interest on House Property Loan

Hi, Friends now we will discuss about tax Deduction Under Section 80EE. This section of the deduction is all about interest for a loan on house property.

According to Income Tax -
'80EE. Deduction in respect of interest on loan taken for residential house property.—(1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property.

What is Deduction Under Section 80E

Section 80EE is a tax rebate or tax deduction on the interest payable for the residential house property loan. The maximum deduction under this section is Rs. 50,000/- which can be availed over and beyond the deduction of under section 24 and Section 80C.

We already covered - 

1. Tax Deduction U/S 80C, 80CCC, 80 CCD
2. Tax Deduction U/S 80D
3. Tax Deduction U/S 80DD & 80DDB
4. Tax Deduction U/S 80GG
5. Tax Deduction U/S 80TTA
6. Tax Deduction U/S 80TTB
7. Tax Deduction U/S 80E

Eligibility for Deduction Under Section 80E 

• Only individuals can eligible for this tax deduction. Company or HUF can not eligible under this deduction.  
• Any individual can claim this Deduction Not for the Principal only Interest component comes under this Deduction.
• The loan must be taken on the name of an assessee who is liable to pay tax and claim this Deduction.  
• The loan must be taken from any financial organization or from any bank for higher education only.

Maximum Amount and Special Feature of Section 80EE

The maximum amount under this section is Rs. 50,000/- but an individual can claims under this section only after he can claim full deduction under section 24 i.e. Rs. 2,00,000/-. If he claim the full amount Rs. 2,00,000/- then after that if he paid some extra interest added to the  Rs. 2,00,000/-  he can claim a deduction under section 80EE maximum to Rs. 50,000/-.

Criteria For Section 80EE

• The loan must be taken  35 lakhs or less.
• The value of house property must be 50 lakhs or less.
• The loan must be sanctioned from 01.04.2016 to 31.03.2017 and on the date on loan sanctioned no other house property owned by the individual.
• The Loan must be taken on the name of assessee who is liable to pay tax.
• The property can be self-occupied or non-self-occupied.

Section 80EEA new section introduced in 2019

The union budget 2019 has introduced a new section 80EEA to extend the tax benefits of the interest deduction up to Rs 1,50,000 for housing loan taken for affordable housing during the period 1 April 2019 to 31 March 2020. The individual taxpayer should be a first-home buyer and should not be entitled to deduction under section 80EE.

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