Section 80EE & 80EEA Deductions under income tax act 1961

This article is about deductions allowed under section 80EE & 80EEA in computing the total income of an assessee. 

Section - 80EE of Income-tax Act, 1961-2020

Deduction in respect of interest on loan taken for residential house property.

Eligible assessee: Individual

👉Deduction allowed against interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential property.

Maximum Amount of Deduction: Rs 50,000

Conditions to be fulfilled:

• This deduction is allowed from the assessment year beginning on the 1st day of April, 2017 and subsequent assessment years.
• Loan should be sanctioned between 1st day of April, 2016 and ending on the 31st day of March, 2017;
• Amount of loan sanctioned for acquisition of the residential house property does not exceed 35 lakh rupees;
• The value of residential house property does not exceed 50 lakh rupees;
• The assessee does not own any residential house property on the date of sanction of loan.

Where a deduction under this section is allowed for any interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other assessment year.

For the purposes of this section,—
(a)  "financial institution" means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies, or any bank or banking institution referred to in section 51 of that Act or a housing finance company;
(b)  "housing finance company" means a public company formed or registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes.

Section - 80EEA of Income-tax Act, 1961-2020

Deduction in respect of interest on loan taken for certain house property.

Eligible assessee: Individual who is not eligible to claim deduction under section 80EE

👉Deduction allowed against interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property.

Maximum amount of deduction: Rs 1,50,000

Conditions to be fulfilled:

• This deduction is allowed from the assessment year beginning on the 1st day of April, 2020 and subsequent assessment year
• Loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2019 and ending on the 31st day of March,2020;
• The stamp duty value of residential house property does not exceed 45 lakh rupees;
• The assessee does not own any residential house property on the date of sanction of loan.

Where a deduction under this section is allowed for any interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other assessment year.

For the purposes of this section,—
(a)  the expression "financial institution" shall have the meaning assigned to it in clause (a) of sub-section (5) of section 80EE;
(b)  the expression "stamp duty value" means value adopted or assessed or assessable by any authority of the Central Government or a State Government for the purpose of payment of stamp duty in respect of an immovable property.

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