Now you will get additional tax benefit of Rs 1.5 lakh on home loan payment

If you want to buy a new house, then there is good news for you. The Government of India is giving you an additional tax benefit of up to Rs 1.5 lakh.

In the budget 2019, the government has brought a new section, section 80EEA.

Under Section 80EEA, you will get an additional tax benefit of Rs 1.5 lakh on interest paid on home loan. Note that this is in addition to the tax benefit of Rs 2 lakh (home loan interest payment) available under section 24. But there are certain conditions for availing tax benefits under 80EEA.

What are the conditions for tax benefit under section 80EEA?

To claim additional tax benefit of Rs 1.5 lakh under section 80EEA, you need to fulfill these conditions.

  1. You get this tax benefit on the payment of interest on the home loan.
  2. Your home loan must have been sanctioned between April 1, 2019 and March 31, 2020.
  3. The cost of your house (Stamp Duty Value) should be up to Rs 45 lakh.
  4. You should not have any house in your name at the time of taking the loan.

You can see that this new tax benefit is only for first time home buyers.

You will not get this tax benefit only in FY2020. Will continue to get it in future also. Just you fulfill the conditions given above.

Tax benefit of Rs 2 lakh is available under section 24 on the payment of home loan interest. This new tax benefit (Section 80EEA) is an additional tax benefit.

If you fulfill all the conditions, then you can get a tax benefit of up to Rs 3.5 lakh on the total interest paid.

What is the difference between the tax benefits of section 24 and section 80EEA?

  1. Both the tax benefits are available on home loan interest payment.
  2. Tax benefit of up to Rs 2 lakh is available under section 24. Under section 80EEA, you get a tax benefit of up to Rs 1.5 lakh.
  3. Section 24 is available on all home loans. Only certain home loans are eligible under section 80EEA. The details of all the conditions are given above.
  4. Benefits under section 24 can be availed only when the construction of your house is complete or you have got possession. There is no tax benefit for under construction property. However, you can take the benefit of payment of interest made at the time of construction in 5 equal installments (after completion of construction). There is no condition of completion of construction for tax benefit of section 80EEA.

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