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Section 80EE – Deduction on Interest on Home Loan

Deduction under section 80EE can be claimed by first-time home buyers for the amount they pay as interest on home loan. Taxpayer can claim a deduction of up to Rs. 50,000 per FY as per Section 80EE.This deduction can be claimed over and above the deduction of Section 24 which is Rs. 2,00,000.

Eligibility:

The deduction under this section available only to Individuals.

Deduction Limit:

Deduction of up to Rs. 50,000 over and above the Rs. 2 lakh limit under section 24 of IT Act.

Other Terms and Conditions:

  • This must be the first house that the taxpayer has purchased.
  • Value of the house should be Rs 50 lakhs or less
  • Amount of loan taken for the house must be Rs 35 lakhs or less
  • The home loan has been sanctioned by a Housing Finance Company or a Financial Institution
  • The loan should have been sanctioned between 01.04.16 to 31.03.17
  • The loan should not been availed for commercial purposes
  • As on the date of the loan sanction, the individual must not be owning another house.

Features of the Deduction:

  • The deduction under Section 80EE can only be claimed by individual taxpayers on properties purchased either singly or jointly.
  • The maximum deduction that can be claimed under this section is Rs. 50,000 during a financial year.
  • The deduction that can be claimed is above and beyond the limit of Rs. 2,00,000, as under Section 24 of the IT Act.
  • The property can be either self-occupied or non-self-occupied.

Section 80EE and Section 24:

If an Individual is able to meet the conditions of both the sections i.e., Section 80EE and Section 24, the individual can avail the benefits under both the sections. First, the Individual need to exhaust the limit under Section 24 and then claim the additional benefit under section 80EE.