The benefit of buying an affordable home by taking a home loan has been extended for a year. The benefit of additional deduction on interest paid on home loans of cheap homes has now been extended to 31 March 2022. In the Budget in July 2019, the Finance Minister introduced a new section 80EEA and announced additional deduction on interest under it.
This deduction was made at 1.5 lakh rupees. This benefit is being given to all taxpayers who have taken home loans to buy cheaper houses. Real estate experts have welcomed the government’s proposal.
Shishir Baijal, chairman and managing director of Knight Frank India, says, “The government has maintained its focus on affordable housing by extending tax benefits by one more year. Increasing this benefit by one more year in a period of the prolonged epidemic will increase the demand for sluggish houses in the country. ”
What is section 80EEA?
Under section 80EEA, any person can claim a deduction of up to Rs 1.5 lakh on the interest paid on a home loan. The condition here is that he should not have any other house property till the date of passing the loan.
This deduction is different from the deduction of Rs 2 lakh on interest payments under section 24 (B) of the Income Tax Act, 1961. One criterion for taking benefits under this section is that the stamp duty of a house property should be Rs 45 lakh or less.
What is Affordable Housing?
According to the Income Tax Department, in large cities such as Delhi, Mumbai, Bangalore, Chennai, Hyderabad and Kolkata, affordable housing is called homes that have carpet areas of not more than 60 square meters (645 square feet). According to the definition of affordable housing, these carpet areas in other cities should not exceed 90 square meters (968 square feet).
Many experts in the real estate sector were demanding that the definition of affordable honors be changed. However, this demand has not been accepted in this year’s budget.