Complete understanding U/s 80EEA- Housing for All
- Introduction in the 2019 Budget, Section 80EEA allows first-time home buyers to save an additional Rs 1.50 lakh per year on home loan interest expenses If they buy a ‘affordable property. The deduction u/s 80EEA is in excess of the INR 2,00,000/- maximum allowed u/s 24. (b). But Under Section 80EEA deduction is tied to the cost of the house and is available on purchases up to Rs 45 lakhs.
- The carpet area of a residence determines its affordability. If a unit is located in a metropolitan city, the carpet area must not exceed 645 square feet (60 square metres) in order for the owner to receive the Section 80EEA advantage. Carpet area has been limited to 968 sq ft or 90 sq metres for flats in any other city.
Budget 2021 Update:
- The government has officially extended the interest deduction permitted for low-cost housing loans obtained between April 1, 2019 and March 31, 2022, in order to achieve the goal of “Housing for All.” Update on the Budget for 2021: The tax break for low-income housing projects has been extended until March 31, 2022.
- Income tax: Starting April 1, 2022, the government will no longer provide an income tax benefit to first-time home buyers under Section 80EEA. In Budget 2019, the government granted an additional 1.50 lakh income tax credit for home loan borrowers who pay stamp duty up to 45 lakh for their first property. This facility was extended for another year in the budgets of 2020 and 2021, respectively.
Section 80EEA & Section 24
- If the owner or his family resides in the house property, homeowners can claim a deduction for interest payments on their home loan up to INR 2,00,000/- u/s 24 of income Tax Act. Even if house is uninhabited, a deduction of up to INR 2,00,000/-is available. The entire home loan interest can be deducted if the property has been rented out.
- You can claim advantages under both Section 24 & Section 80EEA of the Income Tax Act if you meet the requirements of both sections.
- First, use up your Rs 2 lakh deductible limit under Section 24. Then, U/s 80EEA we can claim additional benefits. As a result, this deduction is in addition to the Section 24 will be limit of Rs 2 lakh.
What is section 80EEA Exemption?
Deduction under the Income tax act 1961 for interest paid on housing loan
What is eligibility under section 80EEA deduction?
Budget, 2019, Specified Eligibility to avail of advantage u/s 80EEA.
Who can claim U/s 80EEA deduction Under Income tax?
Only 1st time house buyers can take the advantage under this Section 80EEA, as it particularly mention that at time of issue of the housing loan borrower should not own any other residential property.
Who qualifies as a first-time homebuyer as per the 80EEA ?
A 1st time house buyer is someone who does not have a home in his name when he applies for a mortgage. Even if his parents own homes a working person, even if unmarried is deemed a distinct household for tax benefit and thus a 1st time home buyer.
What is the deduction available under section 80EEA ?
Only home loan interest payments are eligible for a deduction under section 80EEA.
What is the ceiling for the U/s 80EEA deduction?
Annual deduction limit is INR 1,50,000/-.
What time frame is covered by 80EEA?
The Benefits are available to borrowers whose home loans, when it were approved between April 1, 2019 to March 31, 2022.
What are the conditions for claiming the benefit u/s 80EEA ?
There are a some prerequisite for applied to claim the tax relaxation that comes u/s 80EEA income tax act. They are as follows-
- A loan from a house finance business or FI is required to purchase a residential housing property.
- An individual cannot be a claimant of the Section 80EE deduction.
- Stamp duty on a residential property must be less than 45 lakhs.
- This must be the buyer’s first purchase. If he or she has a house registered in their name, they will be ineligible for the Section 80 EEA deduction.
- House loan must be claimed between April 1st, 2019 and March 31st, 2021.
- Carpet area of a residential property in a metropolitan city must be greater than 645 sq ft or 60 metres.
- In other cities, the carpet area of a residential site cannot exceed 968 square feet (90 metres).