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Deduction in respect of interest on loan for residential house property to a first time buyer (Sec. 80EE)

According to this section, deduction shall be allowed to an individual who acquired a residential house property for the first time, in respect of interest on loan taken from any financial institution up to Rs. 50,000 subject to the following conditions:

(i) the loan has been sanctioned by the financial institution during the period beginning on the 1st day of April 2016 and ending on the 31st day of March 2017;

(ii) the amount of loan sanctioned for acquisition of the residential house property does not exceed thirty-five lakh rupees;

(iii) the value of residential house property does not exceed fifty lakh rupees

(iv) the assessee does not own any residential house property on the date of sanction of loan.

Where a deduction under this section is allowed for any interest referred to in sub-section (1) deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other assessment year.

The benefit of deduction shall be allowed till repayment of loan continues.

A Guide to Sec 80EE, Sec 80EEA and Sec 80EEB

Deduction regarding payment of interest on loan taken for certain house property [Section 80EEA]

(i) Eligible Assessee

In case an individual who does not own a residential house property takes a loan to acquire a residential house property, such an individual shall be allowed a deduction regarding the payment of interest.

 

(ii) Conditions

(a) The assessee does not own a residential house property on the date of sanction of loan.
(b) Assessee is an individual.
(c) Loan is taken to acquire a residential house property
(d) The stamp duty value of house property should not exceed ₹45 lakhs.
(e) Loan is sanctioned by a financial institution between 1.4.2019 to 31.3.2020. Financial institution means a bank or a banking institution or a housing finance company etc.
(f) Assessee is not eligible to claim deduction u/s 80 EE.
(g) In case assessee has claimed this deduction u/s 80 EEA then he will not be allowed to claim deduction regarding such interest under any other provision of this Act.

(iii) Amount of Deduction

Least of following 2 amounts shall be allowed as deduction

(a) Interest payable on the amount of loan taken
(b) Rs. 1,50,000

Deduction in respect of the purchase of an electric vehicle [Section 80EEB]

(i) Eligible Assessee

In case an individual has taken a loan to buy an electric vehicle, he shall be allowed a deduction regarding payment of interest on such a loan.

 

(ii) Conditions

(a) Assessee is an individual.
(b) He has taken a loan from a financial institution for purchase of an electric vehicle.
(c) Loan has been sanctioned between 1.4.2019 to 31.3.2023.
(d) Financial institution means a banking company or any bank or banking institution and also includes any deposit taking non-banking financial company.

(iii) Amount of Deduction

Least of the following 2 amounts shall be allowed as deduction:

(a) Interest payable on the amount of loan taken
(b) Rs. 1,50,000

In case assessee has claimed deduction u/s 80EEB, then he cannot claim deduction regarding such interest under any other provision of this Act.

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Category Income Tax, Other Articles by - Ritik Chopra 



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