Section 80ee

Tax queries 349 views 2 replies

Raghav

MBA

25 Points Posted on 20 August 2015

My wife, first time home buyer, has taken a loan of 25 lacs for a apartment of 40 lacs in 2013-14. The possession was taken in FY 2014-15. No claim was under 80ee was made in AY 2014-15. The current situation is as follows. Interest paid during FY2013-14- Rs 1,00,000/- Principle paid during FY2014-15- Rs 30,000/- Interest during FY 2014-15 - Rs 2,20,000/- Unfortunately this was not reflected in Form 16 and now has to be claimed in IT returns. For AY 2015-16, can full interest for 2013 -14 ( i.e 1,00,000) be claimed under section 80ee or only 1/5th of the amount be claimed? In numbers , Under sec 24 : Rs 2,00,000 ( this is clear) Please clarify for section 80ee : should this be Rs 1,00,00 or Rs 40,000 ( 20000 of FY 14-15+ 1/5th of 100000 of FY13-14)?

Replies (2)

CMA Poornima Madhava

CMA

13117 Points Posted on 20 August 2015

Though u have not claimed any deduction u/s 80EE for AY14-15, it cannot be claimed as deduction during AY 15-16. If possible, u can try to revise the return for AY14-15 (provided the assessment is still complete)
However, u can claim 1/5th of 1 lac as pre-construction interest during AY15-16
Assuming the house is going to be self occupied, the total deduction that can be claimed as deduction u/s 24b is Rs.2 lacs. Since interest payable for the FY14-15 itself is Rs.2.2 lacs (which already exceeds the limit), additional 20k (pre-construction period interest) wil not give u any further benefit.
But if the house is let out, then Rs.2.4 lacs (2.2. + 0.2) can be claimed as deduction.