TSection 80EE - Tax Deduction on Interest of Home Loan
Section 80EE allows income tax benefits on the interest portion of the residential house property loan availed from any financial institution. You can claim a deduction of up to benefits on the interest portion of the residential house property loan availed from any financial institution. 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.
Features of the 80EE Deduction
The following are the features of 80EE Deduction under Income Tax
- The deduction under this section is available only to individuals. This means, if you are a HUF, AOP, a company or any other kind of taxpayer, you cannot claim any benefit under this section.
- This deduction is over and above the Rs 2 lakh limit under section 24 of the income tax act.
To claim this deduction, you should not own any other house property on the date of the sanction of a loan from a financial institution only.
Eligibility for Claiming Section 80EE Deductions
To become eligible for claiming 80EE deductions, a taxpayer has to make sure of the following:
- Only individual taxpayers can claim deduction under Section 80EE on properties purchased either singly or jointly. If an individual has bought a property jointly with his or her spouse and they are both paying the instalments of the loan, then the two can individually claim this deduction.
- E-tax benefits are not applicable for Hindu Unified Families (HUF), Association of Persons (AOP), companies, trusts, etc.
- Tax benefits under Section 80EE can only be claimed by first-time home buyers. In order to claim this deduction, the individual must have taken the loan from a financial institution for buying his/her first residential house property.
- Section 80EE is applicable on a per person basis rather than a per property basis.
- To claim this benefit, it is not necessary for the taxpayer to reside in the property for which he or she is claiming this deduction. Borrowers living in rented homes can also claim this deduction.
The following are the conditions for claiming Deduction u/s 80EE
- Value of this house should be Rs 50 lakhs or less
- Loan taken for this house must be Rs 35 lakhs or less
- The loan must be sanctioned by a Financial Institution or a Housing Finance Company
- The loan must be sanctioned between 01.04.2016 to 31.03.2017
- As on the date of the sanction of loan, no other house property must be owned by you.
The deduction can only be claimed by individuals for the house purchases jointly or singly. If a person jointly owns the house with her wife and they both are paying the instalments of the loan, then both of them can claim this deduction.
As is evident, Section 80EE can facilitate a lot of savings on an annual basis. So, if you have an ongoing home loan that you are currently repaying, you should make the most of Income Tax Section 80EE. Ensure that you utilize the deductions offered under this Section and get the much required relief from tax payments.
