Section 80EE of the Income Tax Act, 1961 provides benefits for tax deductions on the interest paid on home loans. Individual taxpayers who have bought a house for the first time and taken a home loan can claim the tax deduction benefit under section 80EE.
Eligibility for Claiming Section 80EE Deductions:
- Benefits are available only to individuals.
- Benefits are not applicable for Hindu Unified Families (HUF), Association of Persons (AOP), companies, trusts, etc.
- The deduction can be claimed if the said property is bought jointly by 2 or more than two individuals.
- You do not necessarily have to reside in the purchased property.
- The Section allows both Resident and Non-Resident Indians to claim benefit.
Conditions for claiming Deduction u/s 80EE:
- The property’s value should not exceed Rs 50 lakhs and the loan value should not exceed Rs 35 lakhs.
- The benefit is meant exclusively to first-time buyers.
- The loan must be sanctioned by a Financial Institution or a Housing Finance Company during the period between April 2016 to March 2017.
- It should be noted that tax benefit under section 80EE can only be availed after the home loan interest payment benefit under section 24 has been exhausted.
- Under section 80EE, additional tax deduction claim upto Rs. 50,000 can be made. This is exclusive of the deduction limit upto Rs. 1.5 lakh available under Section 80C and upto Rs. 2 lakhs available under Section 24 of the IT Act, 1961.
- The loan cannot be availed for commercial properties.
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Note: This Post was last updated on January 23, 2023
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