Section 80EEA – Deduction for Interest Paid on Home Loan for Affordable Housing
- Under the objective “Housing for all”, the government has now extended the interest deduction allowed for low-cost housing loans taken during the period between 1 April 2019 and 31 March 2022.
- Accordingly, a new Section 80EEA has been inserted to allow for an interest deduction from AY 2020-21 (FY 2019-20). The older provision of Section 80EE allowed a deduction up to Rs 50,000 for interest paid by first-time home-buyers for loans sanctioned from a financial institution between 1 April 2016 and 31 March 2017.
- With a view to further the benefit and give impetus to the real estate sector, the government has extended the benefit for FY 2019-20. This deduction can be claimed until you have repaid the housing loan.
Features of Section 80EEA
Eligibility criteria
The deduction under this section is available only to individuals. This deduction is not available to any other taxpayer. Thus, if you are a HUF, AOP, partnership firm, company, or any other kind of taxpayer, you cannot claim any benefit under this section.
Amount of deduction
- A deduction for interest payments up to Rs 1,50,000 is available under Section 80EEA. This deduction is over and above the deduction of Rs 2 lakh for interest payments available under Section 24(b) of the Income Tax Act.
- Read more about the deduction of Rs 2 lakh on interest on home loan here.
- Therefore, taxpayers can claim a total deduction of Rs 3.5L for interest on home loan, if they meet the conditions of section 80EEA.
Other conditions
Similar to Section 80EE, in order to claim deduction under Section 80EEA, you should not own any other house property on the date of the sanction of a loan.
