Getting a home loan and buying property is the best way to make the most of tax benefits. You can save money when you get your home loan and deduct interest from it too. Additionally, from the tax year 2019-20 onwards, you can also get relief from paying taxes through this deduction of ₹1,50,000/-. This deduction was introduced for the assessment year 2020-21 onwards. For home owners, it can be argued that the government is trying to promote affordable low-cost houses by providing a deduction of up to ₹1,50,000. However affordable housing is not available for all due to a lack of subsidies. This deduction is additional to the deduction against income from house property. This deduction can’t be taken off of income from house property, but instead should be deducted off of your gross total income.
What is this deduction u/s 80EEA?
1. This article will provide you with more details about this additional deduction for loans to save on taxes, which is available for interest repayment on housing loan
2. You are able to deduct the interest payments of your friends & relatives as an expense, but this isn’t the case for loans from a bank. This is because there must be some sort of monetary payment on your end for it to be possible.
3. A deductibility of ₹50,000/- u/s 80EE of the Income-tax Act is also available if you borrow a home loan in the financial year 2016-2017. However, this deduction will only be available if you meet the following conditions:
Conditions for eligibility of deduction u/s 80EEA
1. For the time being, this deduction is only available to individuals, not HUFs or firms.
2. The agreement value of the house you bought must not exceed Rs.45,00,000.
3. Home loans usually cost less in the long run and can provide more peace of mind when it comes to your financial future.
4. The home loan must be borrowed before 2020-21.
5. We ask that you have no other residential properties when this home loan is approved
6. This deduction can be claimed from 2020-21 and onward.
7. The amount against which this deduction is claimed can not be claimed as a deduction against any other section for e.g. on a home loan if you have total interest repayment of ₹200,000/-, and you have claimed the same as a deduction against income from house property u/s 24 of the Income-tax Act, then again, you can not claim the same amount as deduction u/s 80EEA. However, if you have interest repayment of ₹2,50,000/- and you have claimed ₹2,00,000/- as deduction u/s 24 of the Income-tax Act then the remaining amount of ₹50,000/- can be claimed as deduction u/s 80EEA
According to section 80EEA of the Indian Income-Tax Act, 1961, you can claim a deduction in your income tax when you are paying an interest on any house property.
1. This deduction is to be deducted from the gross total income, not from income from house property.
2. After taking house property income into account, the same amount is deductible from out from the total income under section 24.
3. If the amount of interest you paid during a financial year hasn’t been completely spent on claiming deductions like those in section 24, you can claim a deduction in section 80EEA.
4. If you live in a home jointly with another person, and both of you have taken the mortgage loan for that property, then you can take a deduction up to ₹1,50,000/-.
0 Comments