The
existing provisions of section 80EE provide a deduction of up to 1 lakh rupees
in respect of interest paid on loan by an individual for acquisition of a residential house property.
This benefit is available for the two assessment years beginning on the 1st day
of April 2014 and on the 1st day of April 2015.
Click to Download the Master of Form 16 Part A&B for Financial Year 2015-16 and Assessment Year 2016-17 [ This Excel Utility can prepare at a time 100 employees Form 16 Part A&B for F.Y.2015-16]
In furtherance of the
goal of the Government of providing ‘housing for all’, it is proposed to
incentivise first-home buyers availing home loans, by providing additional
deduction in respect of interest on loan taken for residential house property
from any financial institution up to Rs. 50,000. This
incentive is proposed to be extended to a house property of a value less than
fifty lakhs rupees in respect of which a loan of an amount not exceeding thirty
five lakh rupees has been sanctioned during the period from the 1st day of
April, 2016 to the 31stday of March, 2017. It is also proposed to extend the
benefit of deduction till the repayment of loan continues.
The deduction under the
proposed section is over and above the limit of Rs 2,00,000 provided for a
self-occupied property under section 24 of the Act.
Click to Download Master of Form 16 Part B which can prepare at a time 50 employees Form 16 Part B for Financial Year 2015-16
These amendments will take effect from 1st April, 2017
and will, accordingly, apply in relation to the assessment year 2017-18 and
subsequent assessment years.
[Clause 37 & 43]
Substitution of new
section for section 80EE. Deduction in respect of interest on loan taken for
residential house property.
Clause 37. For section 80EE of the Income-tax Act, the following section shall be substituted with effect from the 1st day of April, 2017, namely:—
Clause 37. For section 80EE of the Income-tax Act, the following section shall be substituted with effect from the 1st day of April, 2017, namely:—
’80EE. (1) In computing the total income of an
assessee, being an individual, there shall be deducted, in accordance with and
subject to the provisions of this section, interest payable on loan taken by
him from any financial institution for the purpose of
acquisition of a residential property.
(2) The deduction under
sub-section (1) shall not exceed fifty thousand rupees and shall be allowed in
computing the total income of the individual for the assessment year beginning on
the 1st day of April, 2017 and subsequent assessment years.
(3) The deduction under
sub-section (1) shall be subject to the following conditions, namely:—
(i) the loan has been
sanctioned by the financial institution during the period
beginning on the 1st day of April, 2016 and ending on the 31st day of March,
2017;
(ii) the amount of loan
sanctioned for acquisition of the residential house property does not exceed
thirty-five lakh rupees;
(iii) the value of
residential house property does not exceed fifty lakh rupees;
(iv) the assessee does
not own any residential house property on the date of sanction of loan.
(4)
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.
same or any other assessment year.
(5) For the purposes of
this section,—
(a) “financial institution” means a banking company
to which the Banking Regulation Act, 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
