Two provisions once gave first-time home buyers a deduction on home loan interest over and above the ordinary limit. Both windows have closed to new borrowers. Neither is available under the default tax regime. And yet both still matter, because a borrower who qualified when the window was open can keep claiming, and a great many of them do not realise it.<\/p>\n
This note sets out precisely who can still claim, and who cannot.<\/p>\n
Interest on a housing loan for a self-occupied property is deductible up to Rs 2,00,000<\/strong> a year under the head income from house property. Section 80EE and Section 80EEA sit on top of<\/em> that limit, they do not replace it. That is the whole point of them.<\/p>\n All of these conditions must be satisfied.<\/p>\n Deduction:<\/strong> up to Rs 50,000 a year, over and above the Rs 2,00,000.<\/p>\n Who can still claim:<\/strong> only a borrower whose loan was sanctioned inside that 2016-17 window. For them the deduction continues for the remaining tenure of the loan, until the interest is exhausted, provided the other conditions were met at sanction.<\/p>\n Introduced for affordable housing, with a wider window and a larger deduction.<\/p>\n Deduction:<\/strong> up to Rs 1,50,000 a year, over and above the Rs 2,00,000. For a qualifying borrower that is a combined interest deduction of up to Rs 3,50,000<\/strong>.<\/p>\n Who can still claim:<\/strong> borrowers sanctioned inside the 2019 to 2022 window who continue to satisfy the conditions.<\/p>\n Neither 80EE nor 80EEA is available under the new tax regime, which is now the default. They can only be claimed by a taxpayer who has opted for the old regime<\/strong>.<\/p>\n This is where the arithmetic has to be done rather than assumed. The new regime offers wider slabs and a higher rebate; the old regime offers these deductions. For a borrower with a large qualifying interest outgo plus other old-regime deductions, the old regime can still win. For a borrower with a small loan and few other deductions, it usually does not. There is no general answer, only a computation on your own numbers.<\/p>\n Run both before you file. A salaried taxpayer can generally choose each year; a taxpayer with business income has a more restricted right to switch, which makes the first choice more consequential.<\/p>\nSection 80EE: an extra Rs 50,000<\/h2>\n
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Section 80EEA: an extra Rs 1,50,000<\/h2>\n
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The regime question decides everything<\/h2>\n
Comparison at a glance<\/h2>\n