https://jaydeepmitra.com/

You must get loan for affordable housing before March 31 to get this tax break


If you are planning on buying an affordable house by taking a home loan then ensure that your loan is sanctioned before March 31, 2022. This is because the additional tax deduction available for affordable housing under section 80EEA of the Income-tax Act, 1961 will not be available from April 1, 2022. The government in its Budget 2022 proposal has not extended this tax break available for the upcoming financial year 2022-23.

Under section 80EEA, an individual is allowed to claim an additional deduction of Rs 1.5 lakh over and above the Rs 2 lakh deduction available under section 24 of the Income-tax Act, for the interest paid on a home loan taken for an affordable house. An individual can claim maximum deduction of Rs 3.5 lakh for the interest paid on the housing loan using section 24 and 80EEA.

Interest paid up to a total of Rs 3.5 lakh can be claimed as a deduction from gross total income of the borrower thereby reducing his/her taxable income and consequently the tax payable on it.

The section 80EEA deduction can be claimed provided the following conditions are satisfied:

a) The loan has been sanctioned by the lending financial institution during the period between April 1, 2019 and March 31, 2022

b) The stamp duty value of residential house property should not exceed Rs 45 lakh.

c) An individual should not own any residential property on the date of sanction of loan

Abhishek Soni, CEO, Tax2win.in, an ITR filing website says, “To claim deduction under Section 80EEA, an individual must ensure that their home loan has been sanctioned on or before March 31, 2022. Once the loan has been sanctioned, then individual will be able to claim this deduction till the time home loan is fully repaid in the future financial years.”

Soni adds, “Deduction under section 80EEA can be claimed only for buying of residential house property. Further, this deduction can be claimed by individual buyers only. HUFs cannot claim this deduction.”

As per income tax laws, an individual is allowed two tax breaks on home loan EMIs. There are two components to a home loan EMI – principal repayment amount and the interest paid. An individual can claim deduction under section 80C on the principal amount repaid for maximum up to Rs 1.5 lakh. A deduction can also be claimed on the interest paid under section 24 for maximum up to Rs 2 lakh in case of self-occupied house.

“If the total interest amount paid during the financial year exceeds Rs 2 lakh, then individual can claim deduction under section 80EEA, provided the 3 above-mentioned conditions are met,” says Soni



Source link

Spread the word!

Leave a Comment

Your email address will not be published. Required fields are marked *

back to top