• By ADMIN
• Posted 25 Feb, 2023
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Additional deductions for Interest on Housing Loan (Sec 80EEA)

- Rajani Nageswaran                                            

What is additional deductions for Interest on Housing Loan?

Section 80EEA was introduced in the Budget 2019 to allow additional deductions on account of Interest on Housing Loan. In general Interest on housing loan is allowed as deductions u/s 24(b) under the head income from house property. Section 80EEA was introduced to provide deductions over and above what is allowed u/s 24(b).

First time home buyer can claim a deduction of up to 1.5 lakhs per year for interest paid on home loans taken for buying an “Affordable Property” (NOT applicable to own construction cases).

What is an Affordable House Property?

Stamp duty value of residential house property should be Rs 45 lakhs or less.

The carpet area of the house property should not exceed 60 square meter (645 sq ft) in metro cities. In any other cities, it should not exceed 90 square meter (968 sq ft).

To whom available: only individual (Resident or Non-Resident) who are buying a home for first time.

Amount of deduction: 1,50,000 (in addition to 2 lakhs u/s 24(b))

Period of deduction: Till the repayment of loan

Conditions:

• Stamp duty value of residential house property should be Rs 45 lakhs or less.
• The loan should be sanctioned during the period 1.4.2019 to 31.3.2022.
• The loan is borrowed from a financial institution or housing finance company.
• The Assessee should be first time home buyer and should not own any house property on the date of sanction of loan.
• Assessee should not claim any deduction u/s 80EE.If he/she claims, this section is not applicable.
• This section allows deduction only for the interest portion of a home loan.

Whether the joint owners claim deduction u/s 80 EEA separately?

If the joint owners meet all the conditions, they can claim deduction of 1.5 lakhs each.

(For more details write to team@ssacas.com)