Section 80EEA of IT Act: Additional deduction of interest payment in respect of housing loan

CA Piyush Agarwal | Last updated: 25 January 2022

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Quick Summary

Section 80EEA of the Income Tax Act offers an additional deduction for interest paid on housing loans, available from Assessment Year 2020-21. This deduction is capped at Rs 1,50,000 or the actual interest paid, whichever is lower. Crucially, this benefit is available over and above the deduction under Section 24b, potentially allowing taxpayers to claim a total of Rs 3.5 Lakhs in interest deductions.

(Co-related with Section 80EE Section 24b of the Income Tax Act) A new Section 80EEA has been inserted by government to allow for an interest deduction from AY 2020-21 (FY 2019-20). The existing provisions of Section 80EE allow a deduction up to Rs 50,000 for interest paid by first-time home buy

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FAQ :

Section 80EEA is a provision introduced to allow an additional deduction on interest paid for housing loans, applicable from Assessment Year 2020-21.

The maximum deduction available under Section 80EEA is Rs 1,50,000 or the actual interest paid on the housing loan, whichever is lower.

Yes, the deduction under Section 80EEA is available over and above the exemption provided under Section 24b, provided other conditions are met.

Only individual assessees are eligible to claim a deduction under Section 80EEA.

The article mentions that the stamp duty value of the house should not exceed Rs 45 lakhs for eligibility under Section 80EEA, and the loan must be sanctioned during FY 2019-20 for the deduction to apply.