First-time homebuyers can deduct certain expenses from their net taxable income under Sections 80EE and 80EEA of the Income Tax Act. Anyone purchasing a new home can deduct expenses from their net taxable income, thanks to the Income Tax Act sections 80EE and 80EEA.
The range of deductions available under sections 80EE and 80EEA is between ₹50,000 and ₹1,50,000, and only the interest portion of the monthly payment for a home loan is eligible for this deduction. However, it is essential to remember that, depending on when your home loan was approved, you can only deduct expenses under one of Sections 80EE or 80EEA.
On the interest portion of a residential property loan obtained from any financial institution, Section 80EE permits income tax benefits.
According to this section, you may deduct up to ₹50,000 each fiscal year. You can still use this deduction until the loan is completely repaid.
First-time home buyers in India are assisted by an additional facility of income tax relaxation provided by Section 80EEA of the Income Tax Act.
Any first-time home buyer in India is eligible for an additional tax deduction of up to ₹1.5 lakhs under Section 80EEA of the Income Tax Act.
Section 80EE and Section 80EEA are two distinct concepts with similar uses. Examine the main differences between 80EEA vs 80EE here in detail-
|
Characteristics |
Section 80EE |
Section 80EEA |
|
Meaning |
According to the income tax act, a tax deduction or tax benefit can be applied to the interest on a residential mortgage. Section 80EE permits the deduction of up to ₹50,000 per fiscal year. The tax benefit is available until the loan has been paid in full and there are no outstanding interest payments. |
First-time homebuyers investing in reasonably priced homes in India benefit from additional income tax deductions on home loan interest payments under Section 80EEA. However, they can only take advantage of Section 80EEA's advantages if they use a home loan to purchase a reasonably priced property worth ₹45 lakhs. |
|
Maximum Loan Amount |
Maximum Amount of Up To ₹35 Lakhs. |
Not Described. |
|
Maximum Deduction Permitted |
A maximum deduction of ₹50,000 is permitted only on the interest portion of the loan EMIs. |
A maximum deduction of ₹1,50,000 is permitted only on the interest portion of the loan EMIs. |
|
Conditions for Claiming Deduction |
|
|
|
Property Value |
Up To ₹50 lakhs. |
Up To ₹50 lakhs (of stamp duty). |
|
Loan Applicability Period |
Applicable on Home Loans obtained in Fiscal Years 2013-14, 2014-15, and 2016-17. |
Applicable on Home Loans obtained in Fiscal Years 2020-21 and 2021-22. |
|
Unclaimable For |
Associations of Persons (AOP), Hindu Unified Families (HUF), trusts, and other entities are not eligible to take advantage of Section 80EE's income tax deduction. |
Associations of Persons (AOP), Hindu Unified Families (HUF), trusts, businesses, and other entities are not eligible to claim an income tax deduction under Section 80EEA. |
|
Lock-In Period |
None |
None |