A new section 80EEA has been inserted by the government to allow for the deduction of interest from A.Y 2020-21 (F.Y 2019-20). In other words, Existing provisions of section 80EE allow for a deduction of up to Rs 50,000 for interest paid by first-time buyers for a sanctioned loan from a financial institution between April 1, 2016, and March 31, 2017.
Admissibility of amount
For instance, The amount of deduction available under this section should be calculated as follows, whichever is less: –
The actual interest paid or Rs. 1.50.000 / –
This deduction is available In addition to the exemption under section 24B provided other conditions are met.
Therefore, taxpayers can claim a total deduction of Rs 3.50 lakh towards home loan interest, if they meet the conditions of section 80EEA.
Who is eligible?
Individual evaluators only.
Similarly, Section 80EE: Deduction is available on home loan interest in this section. The maximum deduction available as per this section is Rs. 50,000 / – under certain conditions
The cost of the house should be up to Rs. 50 lakh
The loan amount must not exceed Rs. 35 lakh
The loan is expected to be sanctioned from April 1, 2016, to March 31, 2017