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Key Highlights
- You can claim an additional deduction of up to ₹50,000 if you are a first-time homeowner, provided you satisfy the relevant conditions under section 80EE.
- You must not own any other residential property on the date of loan sanction.
- Your home should be up to ₹50 lakh in value, and the loan should be up to ₹35 lakh.
Are you a first-time homeowner? You may know about the home loan tax benefits. However, mere knowledge of this deduction is not sufficient. You should know how to claim it.
In this blog, you will learn how to declare the home loan interest in the income tax section while filing your return. Read on as we make it simple with a quick overview of section 80EE i.e. allowable interest deductions for first-time homeowners. Also Read: Home Loan Process - Step-by-Step Procedure to Get a Home Loan
About Section 80EE
You can claim an additional deduction of up to ₹50,000 if you are a first-time homeowner. This is over and above the ₹2 lakh deduction toward interest payment under section 24(b). Thus, given this additional benefit, you can enjoy a total deduction of ₹2.5 lakh, provided you meet the applicable conditions. Also Read: How to Calculate Home Loan Eligibility?
Section 80EE Eligibility
Let’s first understand the eligibility criteria of section 80EE before addressing how you can mention home loan interest in the income tax section while filing your return. To qualify for making the said claim, you should fulfil the below conditions:
- You must not own any other residential property on the date of loan sanction.
- Your home should be of up to ₹50 lakh in value.
- The loan should be up to ₹35 lakh.
- Where a deduction has been allowed under this section, no deduction shall be allowed for such interest under any other provision.
- The loan must have been sanctioned between 1 April 2016 and 31 March 2017.
Home Loan Interest in The Income Tax Section
Here are the standard steps for declaring home loan interest in the income tax section during return filing:
- Step 1: Visit the official income tax website and navigate to the relevant income tax return.
- Step 2: Fill in the applicable details and income information.
- Step 3: Mark the checkbox for self-occupied property. Next, mention the home loan interest payable.
- Step 4: Ensure all deductions are captured, including section 80EE.
- Step 5: Check the details of total taxable income and pay tax/claim refund as applicable.
By following the above steps and meeting the applicable conditions, you can enjoy the applicable tax benefits and unlock tax savings. In case of doubts or confusion, you may seek the professional advice of your chartered accountant.
Conditions to Claim the Deduction Under Section 80EE
Claim Section 80EE and Optimise Your Taxes FurtherBeing a first-time homeowner is a celebratory moment and a significant achievement. The additional deduction of up to ₹50,000 makes this moment more fulfilling as it helps save tax. Talking about savings, another way to maximise such benefits is by getting a home loan at competitive rates.Several lenders offer home loan solutions. Choose the one that offers lower interest rates and other benefits, including a flexible repayment schedule. Not sure how to go about this? Talk to an Aditya Birla Capital representative today!
FAQS - FREQUENTLY ASKED QUESTIONS
What are the tax benefits under section 80EE?
If you are a first-time homeowner, you can claim an additional deduction of ₹50,000 under section 80EE, provided you meet the relevant conditions.
Can I claim the above deduction through the home loan interest in the income tax section while return filing?
You can declare a deduction under section 80EE through the home loan interest in the income tax section while return filing.
Where can I download the applicable income tax return to declare the home loan interest in the income tax section?
Download the applicable income tax return from the official income tax website and declare the deduction in the home loan interest in the income tax section during return filing.
I am a little confused about the conditions allowing the declaration of home loan interest in income tax section. What should I do?
In case of any confusion about the home loan interest in the income tax section, reach out to your chartered accountant.
Is the deduction under section 80EE over and above the deduction under section 24(b)?
Section 80EE allows additional deduction over and above section 24(b).
What is the maximum deduction under both sections?
The maximum possible deduction under both sections is up to ₹2.5 lakh (up to ₹2 lakh under section 24(b) and up to ₹50,000 under section 80EE).
When should the loan date be sanctioned to claim the deduction under section 80EE?
The loan must have been sanctioned between 1 April 2016 and 31 March 2017.
I own one residential property. Does section 80EE apply in this case?
Section 80EE is for first-time homeowners. If you own another residential property, you do not qualify for deduction under section 80EE.
I have availed a home loan of ₹30 lakh. Will the provisions of section 80EE be applicable?
Section 80EE is applicable if all other conditions are met and your loan is up to ₹35 lakh.
Are there any conditions governing the value of the home?
To qualify for section 80EE, your home should be up to ₹50 lakh in value.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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