Home loan 24B, 80EE, and 80EEA clarification

 Home loan 24B, 80EE, and 80EEA clarification

Important points to remember:

In its first term that started in 2014, the prime minister Narendra Modi-led NDA government launched its flagship ‘Housing for All by 2022’ programme. With the same objective, it also announced the launch of the Pradhan Mantri Awas Yojana (PMAY), to incentivise house purchase through subsidies offered by the centre. 

80EEA was introduced by finance minister Nirmala Sitharaman in the 2019 Union Budget with an aim to give a boost to the centre’s ‘Housing for All by 2022’ programme, by way of offering additional tax benefits on the purchase of affordable homes.

Offered over and above the benefits enjoyed by other categories of buyers, the benefits to first-time home buyers in India are offered under Section 80EE and Section 80EEA.

Buyers can claim deductions under both, Section 24(b) and Section 80EEA, and enhance their total non-taxable income to Rs 3.50 lakhs, if they meet the eligibility criteria. However, deductions under Section 80EEA can only be claimed after exhausting the Rs 2-lakh limit under Section 24(b).

The law clearly states that those claiming benefits under Section 80EE cannot claim rebate under Section 80EEA.

Deduction under Section 80EEA can only be claimed for purchase of housing units, including flats or apartments. The section is not applicable on the purchase of plots.

The deduction under 80EEA (additional 1,50,000), 80EE (additional 50000) deductions can be claimed till the home loan is fully repaid. .