Money Excel - Personal Finance Blog

Menu
MENUMENU
MENUMENU
  • Home
  • Business Ideas
    • 225 Small Business Ideas
    • 40 Online Business Ideas
    • 20 Business Ideas for Beginners
    • 20 small manufacturing business
    • 30 Food Business Ideas
    • 100 Business Ideas low investment
  • Stock Market
    • Best Demat & Trading Accounts 2020
    • Best Stocks 2020 by Experts
    • Best Virtual Trading Apps
    • Best Stock Screener
    • Best Discount Brokers in India
    • Multibagger Stocks of LockDown
    • Rakesh Jhunjhunwala Portfolio
  • Mutual Funds
    • Best Mutual Funds 2020-21
    • Best Direct Mutual Fund Platform
    • Best Mutual Fund Mobile Apps
  • Incometax
    • Income Tax Slab FY 2020-21
    • Income Tax Calculator FY 2020-21
    • Income Tax Refund Request
    • Pay Advance Tax Online
    • Download New 15G -15 H Forms
  • Investment
    • Best Investment Ideas 2020
    • Long Term Investment Options
    • Best Investment Regular Income
    • Best Investment Options NRI
  • Credit Card
    • Best Credit Cards 2020-21
    • Best credit card for online shopping
    • Best Forex Card in India
    • Best Business Credit Cards
    • Credit Cards against Fixed Deposit
  • Insurance
    • Best Term Insurance Plans 2020
    • Best Health Insurance 2020
    • Best LIC Policy 2020
    • Best Car Insurance Companies
    • Best Mobile Insurance Companies
  • Downloads
Home
Home Loan
Section 80EEA – Income Tax Deduction on Home Loan Interest

Section 80EEA – Income Tax Deduction on Home Loan Interest

Raviraj Parekh April 28, 2020

section 80eea

In budget 2019-20, new tax deduction benefits up to 1.5 Lakh is announced by the government. This new tax deduction benefit is applicable under new section 80EEA for the home loan interest rate payments. The main objective behind giving this relaxation is housing for all or affordable housing by 2022. The new tax deduction benefit will help a taxpayer in saving a lot of money at the longer run.

Key features, eligibility condition and benefit of this new income tax deduction are given below.

Section 80EEA – Income Tax Deduction on Home Loan Interest

Features of Section 80EEA deduction

Do not miss below posts -
  • 10 Best Bank for Home Loan in India 2021-22
  • Axis Bank Happy Ending Home Loan Review – Think Thrice
  • Best home loan interest rate comparison
  • Additional tax deduction up to 1.5 Lakh for interest paid on loans taken up to 31st March 2020.
  • This benefit is extended under new section 80EEA. It is an additional benefit on the top of 2 Lakh benefit extended by section 24.
  • The maximum tax deduction on interest amount paid for home loan will be 3.5 Lakhs. 2 Lakh under section 24 and 1.5 Lakh under section 80EEA.
  • The deduction will be available on loans taken up to 31st March 2020.
  • The benefit will be given only on the interest component of the home loan.
  • The tax deduction is applicable on entire home loan tenure.

Also Read – 10 Best Bank for Home Loan in India 2019

Eligibility conditions for claiming a deduction

  • This benefit will be extended only to the first time homeowners. You should not be owner of any other house at the time of sanction to avail this benefit.
  • The stamp duty value of a home should be 45 Lakhs or less.
  • The deduction under this scheme is available only to the individuals. HUF, company or any other kind of taxpayer cannot claim benefit under this section.
  • In order to claim this benefit the property should be self-occupied and affordable.
  • To claim this benefit, the individual must have taken the loan from the financial institution or bank. The loan sanction should be between 1st April,2019 to 31st March,2020.
  • This tax deduction can be claimed for by individual as well as joint home loan borrower. The joint home loan borrower can individually claim this benefit.
  • The above benefit is not applicable for the commercial properties.
  • You need to submit home loan interest certificate in order to claim this benefit.

Section 80EEA and Section 24

Section 24 of the income tax act allows homeowners to claim a deduction up to 2 Lakh on their home loan interest payment. The owner or his family should reside on this property to avail this benefit. The same treatment is applicable if the house is vacant. If it is let out you can claim entire home loan interest as a deduction.

Section 80EEA is a new section introduced for the first time home buyer. If you are able to meet eligibility conditions mentioned in the eligibility section above you can claim an additional 1.5 Lakh tax deduction benefit on home loan interest payment.

Maximum Tax Deduction benefit on Home Loan Interest = 2 Lakh (Section 24) + 1.5 Lakh (Section 80EEA)

Example

Rakesh works in pune in IT company. He lives in pune in a rented house. He purchased property in Surat. His father and family members live in a newly purchased house. He is buying a home for the first time, so he can take benefit of section 80EEA. The cost of a home is 45 Lakh and. He purchased this home by taking a home loan of 40 Lakh in May 2019.

The monthly EMI of this property is Rs.37000. The total of EMI for FY2019-20 will be 4.07 Lakh. This includes principal payment of 0.3 Lakh and 3.77 Lakh of interest component.

As it is self occupied house and fulfilling condition of section 80EEA, Rakesh can claim 3.5 Lakh as tax deduction while filing Income tax return. He will need a home loan interest certificate from bank to avail these benefits.

Do not miss below posts -
  • Best home loan interest rates comparison chart – India
  • Axis Bank Happy Ending Home Loan Review – Think Thrice
  • How to do Home Loan Balance Transfer & Top Up?
Prev Article
Next Article
Tags:home loan interest tax benefit home loan tax benefit 80eea income tax benefit home loan Income tax section 80EEA income tax sections section 24 section 80EEA

About The Author

Raviraj Parekh

Raviraj is the man behind moneyexcel.com. He is PGDBA, engaged in blogging for 10 years. Moneyexcel blog is ranked as one of the Top 10 Personal Finance Blog in India. He is not affiliated with any financial product, service provider, agent or broker. The purpose of this blog is to spread financial awareness and help people in achieving excellence for money. Please note that the views expressed on this Blog/Comments are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.

Leave a Reply

Cancel reply

IIFL Demat Account

Search

Top Posts & Pages

  • Rakesh Jhunjhunwala Portfolio Holdings - January 2021
  • Income Tax Calculator FY 2020-21 (AY 2021-22) – Excel Download
  • 20 small manufacturing business ideas with low cost
  • 235 Small Business Ideas with Low Investment in 2021-22
  • How to check Property Records and Land Records online in India?
  • Cash Deposit Machine Locator – How to find CDM Near You?
  • Best Direct Mutual Funds for Investment in 2021
  • 10 ways to Convert Black Money to White
  • Top 60 Manufacturing Business Ideas
  • LIC Premium Paid Certificate Download For Income Tax Purpose - Online

Subscribe to Blog via Email

Join 5,476 other subscribers

Follow MoneyExcel

Money Excel – Personal Finance Blog

Personal Finance Blog
Copyright © 2021 Money Excel - Personal Finance Blog
| About |Downloads | Contact Us | Sitemap | Disclaimer | Privacy Policy |