On fulfilling the conditions under Section 80EEA, a homebuyer can get a deduction of up to Rs 3.5 lakh (Rs 2 lakh u/s 24 and Rs 1.5 lakh u/s 80EEA) on the interest paid on the home loan.
In addition to receiving deduction of up to Rs 2 lakh from taxable income under section 24 of the Income Tax Act, buyers of affordable housing are eligible for an additional tax deduction of Rs 1.5 lakh under section 80EEA – provided that the value of the house property 45 lakhs and the carpet area of the house property is more than 60 square meters (645 sq ft) in metropolitan cities of Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad) Should not happen. ), Hyderabad, Kolkata and Mumbai (the entire Mumbai Metropolitan Region), while in any other cities or towns, the carpet area should not exceed 90 square meters (968 sq ft).
Therefore, a homebuyer can get a deduction of up to Rs 3.5 lakh (Rs 2 lakh u/s 24 and Rs 1.5 lakh u/s 80EEA) on the interest paid on the home loan, subject to fulfillment of the conditions under section 80EEA. However, unless extended, the benefit can be availed only on home loans sanctioned on or before March 31, 2022.
“Hence with effect from April 1, 2022, buyers will no longer be eligible for additional tax benefit of Rs 1.5 lakh under section 80EEA of the Income Tax Act, 1960, which is currently available for affordable housing. So, if you are looking to buy a home that meets the Section 80EEA eligibility conditions, it is a good idea to get your home loan approved before the March 31 deadline, and then wait for the disbursement,” says Pramod. Kathuria – Said Founder & CEO, EasyLoan.
“There are several sections of the Income Tax Act that allow a home buyer to save tax on interest and/or principal amount. In some ways, this is a gesture by the government to buy the house and reduce the burden on the borrower,” he said.
According to Kathuria, some of the tax-saving provisions are –
- Tax relief under 80C on principal amount (up to Rs 150,000 and tax deductible under section 24(b) on interest payment (up to Rs 2 lakh for self-occupied and full amount under exemption for rent-out properties).
- Deduction under Section 80EE and 80EEA is also available, which has been in force for the last few years.
- 80EE enables an additional deduction of Rs 50,000 in addition to section 24(b) for home loans sanctioned during the financial year 2016-17.
“80EEA and one of my favorites as it enables direct affordable housing – an additional deduction of Rs 150,000 over and above section 24(b). This is applicable to first time home buyers and transaction value below Rs 45 lakhs Also it cannot be clubbed with 80E. As you can see, this is a huge benefit and is clearly defined to support the first time affordable home buyer. Hence, a beautiful move Which started in the 2019 budget and has been extended every year since. Importantly it includes under-construction properties as well as contrary to section 24(b) which was meant for those where possession has been received,” Kathuria said. said.
“Now, the central government will not renew this exemption beyond March 31, 2022. Hence, my advice to potential home buyers (under affordable housing) is that if you are planning to buy a home anytime in the next financial year (FY 2022-23). then go for home loan approval by the end of this financial year (before 31st March 2022). This approval will allow you to avail the benefits under section 80EE A and for the entire tenure of your home loan Also, you can go for disbursal anytime till 31st March 2023.
“It’s a good hack to make sure you don’t miss out on this benefit. Of course, as mentioned earlier, the normal conditions under 80EEA will apply. Also, in my opinion, locking down the house.” Prior home loan approval is always a good move – it indicates that you are a serious buyer and gives you the advantage of negotiation,” Kathuria adds, “Also, if you have already locked in that In dream home, you have to go for closing the home loan approval before March 31, 2022.”
“If you are some time away from perfect home purchase and home loan application, then you need not worry about missing out on this opportunity. As mentioned earlier, there are 80EE and other sections. Also, affordable housing is a priority area for our government, so always be optimistic about a new benefit in the future,” suggested Kathuria.