If home is purchased from fund borrowed in May 2016, what portion of interest is deducted u/s 24(b) and what u/s 80EE. What is difference between the two??
Under Section 24 Owners can claim a deduction of up to Rs 2 lakh on their home loan interest, if the owner or his family resides in the house property (i.e Self occupied). The same treatment applies when the house is vacant. If you have rented out the property, the entire home loan interest is allowed as a deduction u/s 24.
Deduction u/s 80EE : This deduction (up to Rs. 50,000) is over and above the Rs 2 lakhs limit under section 24 of the income tax act if following conditions satisfied :
Value of the house should be Rs 50 lakhs or less
Loan taken for the house must be Rs 35 lakhs or less
The loan must be sanctioned by a Financial Institution or a Housing Finance Company
The loan must be sanctioned between 01.04.2016 to 31.03.2017
As on the date of the sanction of loan, no other house property must be owned by you.
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