Housing loan tax break: From April 1, 2022, new home buyers will not get the benefit of additional tax deduction on interest paid on home loans up to Rs 1.50 lakh. This benefit, available under Section 80EEA, was announced in the 2019 budget. Its objective was to promote the purchase of affordable housing units.
Limited period benefit under section 80EEA
Section 80EEA: In the Budget, 2019, Finance Minister Nirmala Sitharaman announced that first-time homebuyers can avail additional rebate on interest up to Rs 1.5 lakh paid on loans taken to buy affordable housing units. can. Initially, this exemption could be availed by financial institutions only for loans sanctioned between April 1, 2019 and March 31, 2020.
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Anita Basrur, Partner (Direct Taxes), Sudit K Parekh & Co LLP said, “However, in subsequent Finance Bills, the tenure of this sanctioned loan was extended from March 31, 2020 to March 31, 2021 and finally it was extended to 31 March, 2021. By March, 2022. The period was not extended beyond this.”
This was the condition on stamp duty
This tax benefit is in addition to exemption on interest up to Rs 2 lakh paid on home loan interest available under section 24(b) of the Income Tax Act, 1961. Another condition for claiming this benefit is that the stamp duty value of the house property should not exceed Rs 45 lakh.
What is Affordable House
Affordable house: According to the Income Tax Department, an affordable housing unit is one whose carpet area does not exceed 60 square meters (645 sq ft) in metro cities such as Delhi, Mumbai, Bangalore, Chennai and Kolkata. This upper limit is 90 square meters (968 sq ft) in non-metro cities.
limited beneficiary
Even though the additional exemption limit sounds attractive, due to the interest rate scenario, loan to value ratio and other stringent eligibility conditions over the years, only a few borrowers will be able to get the maximum benefit.
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