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Showing posts with label New Income Tax section 80EE. Show all posts
Showing posts with label New Income Tax section 80EE. Show all posts

Wednesday 3 August 2016

Arun Jaitley while announcing the Budget 2016 re-introduced Section 80EE which provides for additional Deduction of Rs. 50,000 for Interest on Home Loan. This incentive would be over and above the tax deduction of Rs. 2,00,000 under Section 24 and Rs. 1,50,000 under Section 80C.

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This Deduction of Section 80EE would be applicable only in the following cases:-
1.                 This deduction would be allowed only if the value of the property purchased is less than Rs. 50 Lakhs and the value of loan taken is less than Rs. 35 Lakhs.
2.                 The loan should be sanctioned between 1st April 2016 and 31st March 2017.
3.                 The benefit of this deduction would be available until the time the repayment of the loan continues.
4.                 This Deduction would be available from Financial Year 2016-17 onwards.
The above 3 Sections relating to Tax Benefits on Home Loans have been summarised as under:-
Particulars
Quantum of Deduction (Rs.)
Self Occupied Property
Non-Self Occupied Property
Section 24
2,00,000
No Limit
Section 80C
1,50,000
1,50,000
Section 80EE
50,000
50,000
Please Note:-
1.                 The above tax deductions are per person and not per Property. So in case you’ve purchased a property jointly and have taken a joint home loan, each person repaying the amount would be eligible to claim the whole deduction separately.
2.                 If you are living in a rented premise and are taking Tax Benefit of HRA Allowance, even then you can claim Tax benefit on home loan under Section 24, Section 80EE & Section 80C.
For claiming the above tax deductions, you would be required to furnish the statement provided by the lender clearly indicating the amount payable and paid towards Interest and Principal. After claiming the above deductions of Tax Benefit on Home Loan, the balance Income of an Individual would be taxed as per the Income Tax Slab Rates.

Tuesday 25 August 2015

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Brief in Section 80EE ( New deduction Under Chapter VIA as House Building Loan Interest Max Rs. 1 Lakh.


First time individual home buyers can get tax deduction on interest of home loan, under newly inserted section 80EE of the Income Tax Act, applicable form assessment year 2014-15 on words Financial Year. This is in addition to tax rebate on interest payment of home loan, under section 24B.

Eligibility for 80EE rebate


This rebate on home loan interest is applicable only for home loans satisfying the following conditions:

i. Loan is sanctioned by a financial institution or housing finance company between 1st April 2013 and 31st March 2014.

ii. Loan amount is Rs. 25 lakhs or less and cost of residential house is Rs. 40 lakhs or less
This should be the only house owned by the taxpayer at the time of sanction.

Maximum deduction limit under 80EE

Up to Rs. 1 lakh can be claimed towards interest payable on home loan from the financial year 2013-14. If interest payable in this year is less than Rs. 1 lakh then the balance can be claimed in the following year.

For instance if interest payable in FY 2013-14 is Rs. 75,000 then tax rebate on remaining Rs. 25,000 can be claimed in FY 2014-15.

The amount claimed under 80EE cannot be claimed for tax rebate under any other sections in any year.

The deduction under sub-section 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, 2013 and ending on the 31st day of March, 2014 and on words financial years.

 (ii) the amount of loan sanctioned for acquisition of the residential house property does not exceed twenty-five lakh rupees;

(iii) the value of the residential house property does not exceed forty lakh rupees;

(iv) the assessee does not own any residential house property on the date of sanction of the 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 provisions of the Act for the 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 (10 of 1949) applies including 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.