If you are a first time home buyer the Government offers you a Tax benefit. This benefit can be claimed on the tax interest paid. This article gives brief details on Section 80EE of the Income Tax Act from the point of view of a Tax Consultant in Chennai.

What is Section 80EE of the Income Tax Act?

Section 80EE permits tax profit on interest on home loan to first time buyers or owners in the following events.

  • This deduction is provided given that the price of the property non inheritable isn’t over Rs. fifty Lakhs and therefore the amount of the loan taken is upto Rs. 35 Lakhs.
  • The loan ought to be sanctioned between the 1st April 2016 and 31st March 2017.
  • The advantage of this deduction would be possible until the time the payment of the loan continues.
  • This deduction would be accessible from the fiscal year 2016-17 and onward.

Points to recollect

  • The earlier tax deductions were for per person and not for per home. This just in case a payer has non inheritable property together and has taken a joint home loan, everyone repaying the loan amount would be qualified to pay the deduction separately.
  • For declaring the higher than write-off, a payer would be expected to furnish the declaration provided by the bank clearly showing the amount owed and paid towards interest and principal.
  • After declaring the higher than deductions of deduction on home loan, the balance financial gain of someone would be taxed as per the tax block rates.

Why was the institution of Section 80EE done?

Mr. Arun Jaitley when declaring the Budget 2016 re-launched Section 80EE that presents for extra deduction of Rs.50,000 for interest on home loan. This thought would be covering and above the write-off of Rs.2,00,000 underneath Section 24 and Rs.1,50,000 underneath Section 80C.

Terms for declaring Section 80EE deductions?

The requirements associated to claim the deductions underneath Section 80EE are:

  • The payer mustn’t own any residential house property on the date of loan sanction.
  • The value of the house property ought to be up to Rs.50 lakhs.
  • The home loan taken ought to be up to Rs.35 lakhs.
  • Section 80EE provides deduction just for the interest portion of a house loan.
  • The house loan should be approved by a Housing Finance organization or a financial organization.
  • As on the day of the loan sanction, the person should not be holding another house property.
  • The deduction isn’t offered for loans on industrial property for industrial businesses.

Who will claim a deduction underneath section 80EE?

  • To be qualified for declaring 80EE deductions, a payer must certify of the points listed below:
  • Individual taxpayers will claim edges underneath this section either separately or conjointly. If someone has purchased a property contemporaneously along with his or her mate and that they are each giving the payments of the loan, then each of them will claim this discount.
  • The deduction isn’t offered to
  1. Association of Persons (AOP),
  2. Hindu Undivided Families (HUF),
  3. Companies,
  4. Trusts, etc.
  5. Only first-time home patrons will claim tax edges underneath Section 80EE i.e. the assesse doesn’t have any residential house property before on the date of sanction of loan. To claim this deduction, the person should have received the loan from a financial organization or bank.
  6. Section 80EE deduction is on the market on a per person basis and not on the premise of per property.
  7. The maximum deduction of Rs 50,000 may be claimed underneath this section.
  8. This write-off is over and higher than the limit of Rs. two lakhs as per section 24.

How to claim write-off underneath section 80EE of tax Act?

To discover on what amount one will claim the deduction, here is what needs to be performed:

  • Estimate the full price of interest that’s given throughout a fiscal year on the house loan.
  • Once the whole interest part is decided, claim deduction up to Rs.2,00,000 (under Section 24(b) of the tax Act, 1961).
  • The surplus amount, up to Rs.50,000, may be claimed underneath Section 80EE of tax Act, 1961.

What will be the full deduction underneath Section 80EE and Section 24?

Tax edges underneath section 80EE and section 24 for interest paid on the house loan may be claimed while filing Income Tax Return in Tambarm, Chennai along to the most accumulative limit of up to Rs.2,50,000. Which may be divided as underneath

  1. Section 24 – Up to Rs 2,00,000
  2. Section 80EE – Up to Rs 50,000
  3. Total Deduction – Up to Rs 2,50,000

Also, for availing the deduction underneath each of these sections you initially got to use the limit offered underneath Section 24 and later on avail the deduction to boot offered underneath section 80EE.

Features of the 80EE Deduction

Eligibility criteria:

The deduction beneath this section is offered solely to people. This means, if you’re a HUF, AOP, an organization or the other remunerator, you cannot claim any profit beneath this section.

Amount limit:

This deduction (up to Rs.50,000) is over and above Rs.2,00,000 limit beneath Section 24 of the Income Tax Act.

Time limit:

Loans for borrowers sanctioned between 1st April 2019 to 31st March 2022 can claim these benefits.

Carpet space limit

According to the Finance Bill, if a unit is found in a metropolitan town, its carpet space shouldn’t exceed 645 square foot or 60 sq metres, to claim the Section 80 EEA profit. For units in the other town, the carpet space has been restricted at 968 square foot or 90 sq metres. Cities that are thought of as metropolitan for this purpose are Bengaluru, Chennai, Delhi, Faridabad, Ghaziabad, larger Noida, Gurugram, Hyderabad, Kolkata, city and Noida.

Points to ponder:

  • Section 80EE came into impact from the year 2013-14. It absolutely was offered for two years, FY 2013-14 and FY 2014-15. The deduction allowed earlier was restricted to a maximum of Rs.1,00,000 in total and was offered for less than two monetary years.
  • However, effective FY 2016-17 (AY 2017-18), this section has been reintroduced. Currently the deduction is allowed for up to Rs.50,000 each year till the loan is repaid.
  • The section doesn’t specify if you must be a Resident to be ready to claim this profit. Thus it is all over that each Resident and Non-Resident Indians will claim this deduction.
  • The section additionally doesn’t specify if this house should be self-occupied to assert the deduction. So, borrowers living in rented homes also can claim this deduction.
  • Moreover, the deduction will solely be claimed by people for the house purchases collectively or severally. If someone collectively owns the house with a married person and that they each are paying the instalments of the loan, then each of them can claim this deduction.


Owing to Section 80EE of the taxation Act, first-time homeowners can currently get pleasure from taxation deductions on the house loans they choose. Owners should make sure to avail on the market deductions, since getting a house is no little act. For this very reason, you need to additionally take all potential steps to safeguard your very first home. This tax benefit can be availed while filing your Income Tax Return. Income Tax Return filing in Tambaram, Chennai  is not a tiresome task, but to make it more flexible and perfect, you can seek help from our PhoenixTax- Tax Consultant in Chennai.