Section 80EE is useful for claiming income tax benefits on the interest paying on the residential house property loan availed from any financial institution. It is possible to claim a deduction of up to ₹ 50,000 per financial year as per Section 80EE . also it is possible to continue to claim this deduction until you have fully repaid the loan.
Also read: Section 80EEA – Deduction for interest paid on home loan for affordable housing
Features of the 80EE Deduction
Eligibility criteria: The deduction under Section 80EE is available for individuals only. if you are a HUF, AOP, a company or any other kind of taxpayer this sections is not applicable for you.
Amount limit: This deduction (up to ₹50,000) is over and above the ₹2 lakh limit under section 24 of the income tax act.
Other conditions: To claim Section 80EE, make sure you are not owning any other house property on the date of the sanction of a loan from a financial institution.
Conditions to be Met for Claiming Deduction
- Value of the house should be ₹50 lakhs or less
- Loan taken for the house must be ₹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.
Things to Remember
Section 80EE came into effect from the financial year 2013-14. It was available for only 2 years, FY 2013-14 and FY 2014-15. The deduction allowed earlier was limited to a maximum of ₹1 lakh in total and was available for only 2 financial years.
However, this section has been reintroduced, effective FY 2016-17 (AY 2017-18). Now the deduction is allowed for up to ₹50,000 per year until the loan is repaid.
The section does not specify if you need to be a Resident to be able to claim this benefit. Therefore it can be concluded that both Resident and Non-Resident Indians can claim this deduction. The section also does not specify if this house should be self-occupied to claim the deduction. So, borrowers living in rented houses can also claim this deduction.
Moreover, the deduction can only be claimed by individuals for the house purchases jointly or singly. If a person jointly owns the house with a spouse and they both are paying the instalments of the loan, then both of them can claim this deduction.
Section 80EE and Section 24
If you are able to satisfy the conditions of both Section 24 and Section 80EE of the Income Tax Act, be quick to claim the benefits.
- First, exhaust your deductible limit under section 24, which is ₹2 lakh.
- Then go on to claim the additional benefits under section 80EE.
Therefore, this deduction is in addition to the ₹2 lakh limit allowed under section 24.
Final Thoughts
Section 80EE is useful for claiming income tax benefits on the interest paying on the residential house property loan availed from any financial institution. In this post a small outline of the Section 80EE is explained. i hope you will get an idea about Section 80EE through this post.
Happy taxfiling