Exemptions U/s 80 E –Vs- EEA on Home Loan interest which is benefited

In this post, we will dive deeper into exemptions under the 80EEA of the Income Tax Department.

 

What is Section 80EEA?

 

Section 80EEA Additional Discount for Individuals for Paying Interest on Home Loans However, HUF, AOP, BOI, partnership firm or any other taxpayer is not eligible for exemption under section 80EEA.

 

Section 80EEA has been introduced to increase the benefits approved under Section 80EE for low-cost housing. Exemption / 80EEA can be claimed till the home loan is not repaid.

 

The maximum discount under Section 80EEA is up to Rs.1,50,000. This discount is more than the 24 discounts of the department (maximum Rs. 2 lakhs). Therefore, taxpayers can simultaneously claim both Section 80EEA and Section 24 (discount of 3.5% of the total). If you claim 80EEA, you cannot claim a waiver under section 80EE.

You may also, like- Automated Income Tax Revised Form 16 Part B which can prepare at a time 50 Employees Form 16 Part B for the F.Y.2020-21

How to claim U / S 80EEA discount?

There are several conditions for a US / S80EEA discount:

 

 A housing loan should only be taken to buy a residential home property.

 

Financial should also be taken from a "financial institution".

 

 She should be a first-time domestic worker. He should not have any home property on the date of sanction.

 

The stamp duty value of Rs. 45 lakhs or less.

 

The approval should be between 01-04-2019 to 31-03-2020.

 

The appraiser is not claiming any exemption under section 80EE.

You may also, like- Automated Income Tax Revised Form 16 Part B which can prepare at a time 100 Employees Form 16 Part B for the F.Y.2020-21

 

The "carpet area" has one additional condition:

The carpet area of the Met property should not exceed 60 square meters (645 sq ft) in the metropolitan city including Bangalore, Chennai, Delhi NCR (Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad, Faridabad, Faridabad, Hyderabad, Faridabad, Hyderabad). Mumbai Metropolitan Region).

 

Met In cities or towns except for metropolitan cities it should not be above 90 square meters (968 square feet).

 

This applies to affordable housing projects approved on or after September 1, 2019.

 

Section 80EEA does not specify if you must be a resident to claim this benefit. Thus, both resident and non-resident Indians can claim it.

You may also, like- Automated Income Tax Revised Form 16 Part A&B which can prepare at a time 50 Employees Form 16 Part A&B for the F.Y.2020-21

 

Section 80EEA also does not specify whether residential homes should be self-occupied to claim this benefit so, people living in rented homes can also claim it.

 

Individuals who have bought a home jointly or individually can claim this discount. If a person jointly owns the house with his / her spouse and both of them have paid the loan, then both of them can claim this discount.

 

Conclusion:

What is a “financial institution” in 80EEA?

Reg is a banking company that enforces the Banking Regulation Act

 

 Any banking institution mentioned in Section 51 of the Act or

 

Housing is a real estate finance company

 

What is the “stamp duty value” at 80EEA?

Price accepted/evaluated/ evaluated by:

 

Government No authority of the Central Government or

 

The state is a state government

 

For the purpose of paying stamp duty on immovable property

You may also, like- Automated Income Tax Revised Form 16 Part A&B which can prepare at a time 100 Employees Form 16 Part B for the F.Y.2020-21

 

What is the "carpet zone" of the 80EEA?

 

Price accepted/evaluated/ evaluated by:

 

Government No authority of the Central Government or

 

The state is a state government

 

For the purpose of paying stamp duty on immovable property

The disparity among the  Section 80EEA and Section 80EE

 

Now let’s look at some of the differences between the 80EEA category and the 80EE category.

Category 80EEA-

 

1) The stamp duty value of the house should be Rs 45 lakh or less.

 

2) Approved term from 01-April-2018 to 31-March-2020,

 

3) The maximum discount amount is Rs. 1,50,000

 

4) Limitless value of the land.

 

Section 80EE

 

1) The value of a house should be 50 lakhs or less.

 

2) Sanan Approved Term 01-April-2016 to 31-March-2017.

 

3) The maximum discount amount is Rs. 50,000

 

4) The value of land should not be more than 35 lakhs.

 

The difference between section 80EEA and paragraph 24

 

The table below shows the differences between 80EEA and Section 24.

 

 Section 80EEA

 

1) You can claim a deduction as soon as you start paying your interest. It does not impose any occupation requirement.

At the same time, we have come to the end of this post on exemptions under section 80EEA.

 

2) Only loans from banks and financial institutions are allowed.

 

3) The maximum discount amount is Rs. 1,50,000

 

4) There are certain conditions for claiming a discount.

 

Section 24

 

1) You must be at home to claim a discount.

 

2) Allows loan taken from any institution

 

3) The maximum discount amount is Rs. 200,000

 

4) There is no condition to claim a discount.

 

At the same time, we have come to the end of this post on exemptions under section 80EEA.

Download Automated Income Tax Salary Arrears Relief Calculator U/s 89(1) with Form 10-E from the F.Y.2000-01 to the F.Y.2021-22 (Updated Version)

 

On June 11, 2021 by www.taxexcel.net

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Section 80EEA

Budget 2019 proposes the insertion of section 80EEA to increase the benefit of Tax Deduction on the interest paid towards home loan up to Rs 45 lakhs for affordable housing. The additional tax deduction of Rs 1.50 lakhs is for the home loan taken up to 31^st March 2020. The cumulative benefit would be Rs 7 lakhs for 15 years loan.

Affordable Housing means a dwelling unit with carpet area less than or equal to 60 square meters in metropolitan cities or 90 square meter in cities or towns other than metropolitan cities of Bengaluru, Chennai, Delhi National Capital Region (limited to Delhi, Noida, Greater Noida,

Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of Mumbai Metropolitan Region).

Presently, in case of a self-occupied house, the benefit of the tax deduction on the interest paid on home loan under section 24B is restricted to Rs 2 lakhs and on the principal repayment of the home loan the limit is Rs 1.50 lacs under section 80C.

On December 05, 2019 by www.taxexcel.net

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Income Tax Deductions from Gross Total Income AY 2020-21 & FY 2019-20

Income Tax Deductions from Gross Total Income relevant for Assessment The year 2020-21 & Financial Year 2019-20 as per Finance Bill 2019]

Relevant deductions from gross total income under section 80 C to 80 U [Chapter VI-A] of income tax are given below:

On October 28, 2019 by www.taxexcel.net

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As per the Finance Budget 2019, some Important Income Tax Section and Income Tax Rebate has changed. The Major modification including the Income Tax Slab Rate for the F.Y. 2019-20 is given below.

On September 04, 2019 by www.taxexcel.net

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Budget 2015 provided for additional exemption of Rs 50,000 for investing in NPS (National Pension Scheme) Tier 1 account u/s 80CCD(1B). This was to encourage NPS as a popular retirement planning option. And we all know anything related to tax saving automatically becomes a popular investment avenue. In an earlier post we had highlighted why you should invest in equity mutual funds than NPS, but still, I got people who were interested in opening NPS account and take advantage of Section 80CCD(1B).

Eligibility for NPS Account:

NPS account can be opened by anyone with age between 18 to 60 years. Even NRIs are eligible to open NPS accounts. NRIs can invest through normal banking channels or out of funds held in their NRE/FCNR/NRO account.

NPS Account Tiers:

NPS has two tiers.

1.                 Tier -I account is the primary account and the contribution to this account is locked till retirement.

2.                 Tier- II account is optional saving account and deposit and withdrawal to this account can be done anytime.

Type of NPS Account:

There are 4 types of account depending on the type of subscriber.

1.                 Government Sector – this account is opened for Government employees by their respective employers

2.                 Corporate Sector – this account is opened for Private Sector employees by their respective employers

3.                 All Citizen Model – for all citizens who are not covered in the above two categories

4.                 NPS Lite / Swavalamban – this is Government sponsored NPS scheme with some subsidy from the government

How to open the NPS Account?

The good news is opening NPS account is relatively simple. You can download the NPS application form by clicking here.

After filling the form you can submit it to your nearest Point Of Presence – Service Provider (POP-SP) along with your PAN card, address proof, canceled cheque, and the cheque for initial deposit.

How to fill NPS Account Opening Form?

The NPS account opening form is a 4-page simple form. The first page asks for Personal Details, Address, contact details, and bank details.

Page 2 has nomination details, NPS option, Pension Fund Selection and investment option selection.

Page 3 is just KYC verification by POP-SP.

Page 4 is the instruction page.

Select your Pension Fund

There are a total of 7 pension fund managers

1.                 LIC Pension Fund Limited

2.                 SBI Pension Funds Private Limited

3.                 UTI Retirement Solutions Limited

4.                 ICICI Prudential Pension Funds Management Company Limited

5.                 Kotak Mahindra Pension Fund Limited

6.                 Reliance Capital Pension Fund Limited

7.                 HDFC Pension Management Company Limited

Out of the above 7 only LIC, SBI and UTI are available for Government employees while all 7 are available for all other NPS accounts.

Asset Investment Options:

There are 3 types of assets you can invest in.

1.     Asset Class E– Investment in predominantly equity market instrument.

2.     Asset Class C-Investment in fixed income instruments other than Government Securities

3.     Asset Class G– Investment in Government Securities/Bonds

Active Vs Auto Choice:

You need to select between active and auto investment choice.

Active Choice – in this case, you can select the allocation between the above 3 asset classes. You can invest a maximum of 50% in Asset Class E.

Auto Choice – in the case of auto choice the allocation between assets happen based on the age of the subscriber. Till the age of 35 years, the allocation is 50% in Class E, 30% in Class C and 20% in Class G. every year the asset distribution is changed such that Class E is reduced by 2%, Class C reduced by 1% and Class G increased by 3%. At the age of 55, there is only 10% invested in Class E and C each and rest 80% is in Class G. The above asset distribution is done to keep the volatility to the minimum as the subscriber reaches withdrawal stage.

Download Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10 E from the Financial Year 2000-01 to Financial Year 2018-19

How to Open NPS Account Online?

You can also open NPS account online if you have internet banking enabled for any of the 10 participating banks – Allahabad Bank, Bank of India, Bank of Maharashtra, Oriental Bank of Commerce, South Indian Bank, State Bank of Travancore, State Bank of Hyderabad, State Bank of Patiala, Tamilnadu Mercantile Bank and United Bank of India. .

Just go to e-NPS website, fill up the form and make the initial contribution.

Next, take a printout of the form, paste your photograph (do NOT sign across the photograph) & affix the signature. The form should be sent within 90 days from the date of allotment of PRAN to CRA at the following address:

Central Recordkeeping Agency (eNPS)

NSDL e-Governance Infrastructure Limited,

1st Floor, Times Tower,

Kamala Mills Compound, Senapati Bapat Marg,

Lower Parel, Mumbai – 400 013

What after NPS Form Submission?

On submission of NPS form, a 17 digit Permanent Retirement Account Number (PRAN) will be allotted to you. Within 2-3 weeks you would get a welcome kit containing a PRAN Card, IPIN/TPIN, Subscriber Master Report, Scheme Information Booklet along with a Welcome Letter through the post.

Subsequent Contributions:

All the active NPS account holders can do subsequent contributions online. For every contribution, you need to authenticate PRAN using the OTP sent on the registered mobile number. Next, you can pay using your debit card or internet banking.

Investment Limit in NPS:

The initial contribution has to be made at the time of submitting the form at the POP-SP. The initial contribution should be minimum Rs 500 for Tier-I account and Rs 1,000 for Tier-II account.

Thereafter you should contribute at least once every year in both Tier-I and Tier-II (if opened) account. The minimum contribution should be rs 500 for Tier-I account and Rs 250 for Tier-II account.

Overall the minimum contribution should be Rs 6,000 for Tier-I account and there is no maximum investment limit. The minimum balance for Tier-II account should be at least Rs 2,000 at the end of each financial year.

There is no limit to the number of times you can make a deposit.

The penalty for not making minimum Contribution:

If the subscriber fails to make the above minimum contribution, a default penalty of Rs. 100 per year of default is levied and the account would become dormant. In order to reactivate the account, the subscriber would have to submit form Form UOS-S10 pay the minimum contributions (Rs 500), along with penalty (Rs 100), due for the period of dormancy. The dormant account will be closed if the account value falls to zero.

Charges for NPS:

NPS charges can be classified into 4 headers:

1.                 Point of presence (PoP) charges

2.                 Central record-keeping agency (CRA) charges

3.                 Pension fund management charges and

4.                 Custodian charges

NPS Tax Benefits:

NPS Tier -I account has tax benefit under 3 sections:

1. Section 80CCD(1) – Employee contribution up to 10% of basic salary and dearness allowance (DA) up to 1.5 lakh is eligible for tax deduction. [This contribution is part of Sec 80C 1.5 Lakh investment limit]. Self-employed can also claim this tax benefit. However, the limit is 10% of their annual income up to a maximum of Rs 1.5 Lakhs.

2. Section 80CCD(1B) – Additional exemption up to Rs 50,000 in NPS is eligible for income tax deduction. This was introduced in Budget 2015.

3. Section 80CCD(2) – Employer’s contribution up to 10% of basic plus DA is eligible for deduction under this section above the Rs 1.5 lakh limit in Sec 80CCD(1). This is also beneficial for an employer as it can claim tax benefit for its contribution by showing it as a business expense in the profit and loss account. Self-employed cannot claim this tax benefit.

On January 23, 2019 by www.taxexcel.net

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