Important Features of the Section 80EE Deduction


Eligibility Criteria:

The deduction under this section is available exclusively to individuals. What this means is that if you are operating as a company, or are a HUF, AOP, another type of taxpayer, you would not be able to claim tax deduction benefit under the section 80EE.

Amount Limit:

According to Section 80EE, the tax deduction limit of Rs. 50, 0000 is over and above the limit of Rs. 2 lakh, which falls under section 24 of the Income Tax Act.

Other Conditions:

If you are an individual who wants to claim income tax deduction under this Section, you should not possess a residential house property on the date of sanction of the loan from the financial institution of your choice.

Conditions to be met for Claiming an Income Tax Deduction

  • You should not posses any residential property as the date of sanction of loan.
  • Value of your home should be less than or equal to Rs. 50 Lacs.
  • Home loan acquired should be less than or equal to Rs. 35 Lacs.
  • A Financial Institution or a Housing Finance Company should sanction your Home Loan.
During the financial year of 2013-2014, Section 80EE came into effect. It was in function for a brief two years in the financial years of 2013-2014 and 2014-2015. The income tax deduction allowed previously was strictly restricted to Rs. 1 lakh maximum and was available for just two financial years.

Now, the Section has been introduced all over again from the financial year 2016-2017, i.e., the annual year 2017-2018. The income tax deduction allowed now is up to Rs. 50K per year until your loan is completely repaid.

However, Section 80EE fails to mention if you are required to be a resident of India to be able to claim an income tax deduction. So, we can be certain that both Resident Indian and NRI can enjoy income tax deductions under this Section.

Moreover, Section 80EE also fails to mention if the residence should have to be self-occupied to enjoy the perquisites of tax deduction. Hence, renters residing in rented homes can also claim this deduction. Please note that individuals can exclusively claim the income tax deduction for purchasing the house singly or jointly.

In case, an individual concurrently buys the home with their spouse, and are paying the installments of the house loan together, then both of these individuals can apply and claim income tax deductions.

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DISCLAIMER

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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