The euphoria that comes with purchasing your first house is unique. Especially after enduring the rigorous process of searching for the ideal property that matches your finances and satisfies your requirements, as well as the tedious procedure of applying for a home loan. However, if you are a first-time home buyer, a home loan may prove to be a boon in certain cases. The government provides several tax deductions related to the repayment of home loans under Section 80EE: home loan interest deduction. To be eligible for these deductions, you need to be familiar with the 80EE eligibility requirements and any additional criteria that are linked with claiming them.
First-time home buyers are eligible for a home loan interest deduction under Section 80EE of the Internal Revenue Code. A tax break of up to one lakh rupees is available for those who took out house loans during the financial year 2013-2014.
The tax relief provided by the deductions that may be claimed under section 80EE was established to help low-income homebuyers. According to Section 80EE, the only people who are qualified to claim tax deductions for the interest they pay on their mortgage are first-time purchasers.
Here is a list that describes the several features of the home loan interest deduction offered under Section 80EE:
Only individuals may claim the deduction provided by this provision. Due to this, whether you are a HUF, an AOP, a corporation, or any other type of taxpayer, you are not eligible to make a claim for any compensation under this section.
There is a maximum deduction of Rs 50,000 available. This amount exceeds the limit of Rs. 2 lakh that is specified in Section 24 of the Income Tax Act.
In order to qualify for this deduction, the taxpayer cannot simultaneously own any other properties at the time that the loan is being processed. If you and your spouse own the property jointly, you may split the tax advantage proportionally between the two of you.
The following are the requirements that must be met in order to be eligible to claim a home loan interest deduction under Section 80EE:
The following steps need to be taken in order to calculate how much of a tax deduction may be claimed in accordance with Section 80EE:
It is possible to claim home loan interest deduction under sections 80EE and 24, with a maximum cumulative cap of up to Rs 2,50,000. These breaks may be claimed jointly. Also, in order to make use of the tax benefits provided by both of these sections, you are first required to make use of the limit provided by section 24, and then you are required to make use of the tax benefits additionally provided by section 80EE.
Under Section 80EEA, first-time home buyers investing in affordable homes in India enjoy additional income tax deductions on home loan interest payments. However, the benefits of Section 80EEA are applicable only if they buy an affordable property with the help of home loans. Section 80EEA of the Income Tax Act enables home buyers to make up to Rs 1.50 lakh of their income in a year tax-free. The applicability of Section 80EEA is valid on home loans taken between April 1, 2019, and March 31, 2022.
It should come as no surprise that the provisions of Section 80EE might make it possible to realise significant yearly cost reductions. If you are presently making payments on a house loan that is still outstanding, make sure to take advantage of the deductions that are available to you under this section in order to get the much-needed relief from your tax obligations.
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