Tax Benefits on Home Loan: According to experts, home buyers in the affordable housing category can get a total tax exemption of up to Rs 3.5 lakh on home loan interest.
Tax Benefits on Affordable Housing: Are you planning to take a home loan to buy a house? If yes, do you know that you can avail a total tax benefit of up to Rs 3.5 lakh on home loan interest, provided you fulfill certain criteria. Actually, this discount can be available on buying a house falling in the category of affordable housing. To know whether you can get the benefit of this exemption or not, you have to read the fire mentioned things carefully.
Actually, tax exemption of up to Rs 2 lakh on home loan interest is available under section 24(b), while additional tax exemption of 1.5 lakh can be available under section 80EEA. This means that you can avail tax benefit of up to Rs 3.5 lakh in total. But for this additional exemption, you must meet the following conditions:
These are the conditions of additional tax benefit under section 80EEA
According to Dr. Suresh Surana, Founder, RSM India, a taxpayer can get an additional tax benefit of up to 1.5 lakhs under section 80EEA on home loan interest, provided he fulfills the following conditions-
- The value of the house in terms of stamp duty should not exceed Rs 45 lakhs.
- Home loan sanctioned between 1st April 2019 to 31st March 2022.
- The home buyer should not be the owner of any other house at the time of sanction of the loan.
According to Dr. Surana, there is a provision of interest deduction up to Rs 2 lakh under section 24 (b). In such a situation, if a person fulfills all the above-mentioned conditions and is paying interest of Rs 3.5 lakh per annum on the home loan, then he can pay Rs 1.5 lakh under section 80EEA and Rs 2 lakh under section 24(b). Can claim to get the benefit of deduction.
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Few days left in deadline
As per the existing rules, to avail this additional benefit on home loan in the affordable housing category, then the loan should be sanctioned between 1st April 2019 to 31st March 2022. That is, if you want to take advantage of this rule, then hurry up. There are only a few days left in the deadline.
What if the carpet area is not mentioned in the property document?
Section 80EEA also provides that the carpet area of an affordable housing property is 60 square meters in metropolitan cities such as Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai. (645 sq. ft.). In other cities or towns, the carpet area of an affordable house should not exceed 90 square meters (968 sq ft). In such a situation, there may be confusion in the mind of the taxpayer that if the carpet area of the house is not mentioned in his property document, then he will get the benefit of additional tax exemption of Rs 1.5 lakh under section 80EEA or not. Let us know what is the opinion of experts on this.
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What do experts say
Atul Monga, CEO and Co-Founder, Basic Home Loan says, “It is not usually that the covered carpet area is not mentioned in the property document. But even if this is the case, a technical report is generated during the technical verification of the property, which is submitted to the bank. This report mentions all the necessary details related to the property, such as area, location, valuation. The home buyer can also claim additional tax benefits under Affordable Housing based on the details given in this report.
However, according to Dr. Suresh Surana, Founder, RSM India, the covered area of a residential flat is not mandatory for claiming deduction under section 80EEA. They are of the view that under Section 80EEA of the Income Tax Act, 1961, the benefit of deduction up to Rs. Is.
(Article: Amitava Chakrabarty)
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