Section 80EE – Additional deduction of interest on residential housing loan

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Section 80EE – Additional deduction of interest on residential housing loan

Section 80EE has been introduced in the finance act 2013, which provided deduction in respect of interest on loan taken for residential house property. By taking benefit of this section individuals tax outcome can be reduced to the extent of Rs 30,000.

Please find below highlights of this section.

Deduction in respect of interest on loan taken for residential house property under Section 80EE

An individual is allowed a deduction upto a limit of Rs 1,00,000 being paid as interest on a loan taken from a Financial Institution, sanctioned during the period 01-04-2013 to 31-03-2014 (loan not to exceed Rs 25 lakhs) for acquisition of a residential house whose value does not exceed Rs 40 lakhs. However the deduction is available if the assessee does not own any residential house property on the date of sanction of the loan.

Conditions of Section 80EE

1. The Deduction is available for two years i.e. for A.Y. 2014-15 & A.Y. 2015-16.
2. Total Deduction which can be claimed in Both years in aggregate is Rs. 1,00,000/-.
3.  Deduction under Section 80EE  is in addition to deduction Under Section 24.

Eg. If an assessee is paying interest on Self Occupied Property Purchased during A.Y. 2014-15 of Rs. 2.40 Lakh , he can claim interest up to 1.50 Lakh under section 24 and balance 0.90 lakh under Section 80EE .  Assessee can claim the balance deduction of Rs. 0.10 Lakh under Section 80EE in Assessment Year 2015-16.


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