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What is Section 80EE, Deduction for Interest on Housing Loan?
Section 80EE of the Income Tax Act allows individuals to claim a deduction of up to Rs. 50,000 on interest paid on home loans. This deduction is available for first-time homebuyers and is applicable if the loan amount does not exceed Rs. 35 lakh and the property's value is within Rs. 50 lakh.
Note: The loan should be sanctioned between 1-4-2016 to 31-3-2017. Also, This deduction is applicable only if the taxpayer chooses to follow the old tax regime.
Who is Eligible to claim Interest Deduction on Housing Loan under Section 80EE?
The benefit of this deduction is exclusively available to individuals. Therefore, entities such as HUFs, AOPs, companies, or other types of taxpayers are not eligible to claim it.
What was the recent Budget 2023 Update related to Interest on Housing Loan u/s 80EE?
The Budget 2023 suggests that when determining capital gains from selling a residential property, the acquisition cost should exclude any home loan interest deductions claimed by the seller during the period of ownership.
What is the Deduction Limit in Respect of Interest on Housing Loan u/s 80EE ?
The deduction can go up to Rs. 50,000 and is in addition to the Rs. 2 lakh limit allowed under Section 24 of the Income Tax Act.
What are the Other conditions to claim Interest Deduction on Housing Loan u/s 80EE?
In order to avail the deduction under section 80EE, you must not own any other residential property at the time the loan is sanctioned by the financial institution.
What is the Eligibility Criteria for Claiming the Deduction on Interest on Housing Loan u/s 80EE?
Following are the eligibility criteria for claiming the deduction on interest on the housing loan u/s 80EE:
1. The value of the property should not exceed Rs. 50 lakh.
2. The loan amount must be Rs. 35 lakh or less.
3. The loan must be sanctioned by a financial institution or housing finance company.
4. The loan should be sanctioned between 01.04.2016 and 31.03.2017.
5. You must not own any other residential property at the time the loan is sanctioned.
What are requirements for Section 80EE and Section 24 of Income tax?
If you meet the requirements for both Section 24 and Section 80EE of the Income Tax Act, make sure to claim both benefits.
Start by utilizing the Rs. 2 lakh deduction limit under Section 24. After that, you can claim the additional deduction under Section 80EE.
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