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 from the assessment year 2014-15 and On-words A.Y. This is in
addition to tax rebate on interest payment of home loan, under section 24.
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 and on words F.Y. 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.
How to get
80EE tax benefit
You can either produce certificate from your lender to the HR and get
deduction on salary TDS or you can deduct the amount from total income while
filing income tax return.
