Additional Deduction of Interest on Housing Loan

Any taxpayer who has purchased or constructed a house with a borrowed capital is allowed a deduction with respect to interest paid on such loan under section 24(b) of the Income Tax Act.

Such deduction of interest under section 24(b) is allowed up to Rs 2,00,000/- With the objective of ‘Housing for All’, government of India introduced additional tax benefits for taxpayers who intend to acquire, purchase or construct a residential house property. To enable this, Section 80EE & Section 80EEA has been introduced where an individual can claim deduction with respect to interest paid on borrowed capital/ housing loan. This deduction can be claimed over and above deduction of Rs 2,00,000/- allowed under section 24(b) of the Income Tax Act.

Tax RateTax Rate
Who can claim deduction?Any individual can claim deduction has a liability to pay interest on loan taken to purchase or construct a residential house property and such loan is taken from a financial institution or housing finance company.Any individual who is not eligible under Sec 80EE, can claim deduction has a liability to pay interest on loan taken to purchase or construct a residential house property and such loan is taken from a financial institution or housing finance company.
What is the time limit of acquiring home loan?The loan should be sanctioned between 1st April 2016 to 31st March 2017The loan should be sanctioned between 1st April 2019 to 31st March 2022
What is the Quantum of Deduction allowed?The deduction under this section shall be allowed upto Rs 50,000/-The deduction under this section shall be allowed upto Rs 1,50,000/-
What are the conditions to claim deduction?
  • The amount of loan does not
    exceed Rs 35,00,000/-
  • The Value of residential property
    does not exceed Rs 50,00,000/-
  • The taxpayer does not own any
    residential house property on
    date of sanction of loan.
  • The Stamp Duty Value of
    residential property does not
    exceed Rs 45,00,000/-
  • The taxpayer does not own any
    residential house property on
    date of sanction of loan.
  • The taxpayer should not be
    eligible to claim deduction
    under section 80EE.
How can a taxpayer claim deduction under section 24(b) and section 80EE/80EEA?When a taxpayer is eligible to claim deduction under both section 24(b) as well as section 80EE/80EEA, then the limit of Rs 2,00,000/- shall be exhausted first and then claim deduction under section 80EE/80EEA for any interest paid above Rs 2,00,000/-

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