The most recent amendment to the Income Tax Act of 1961, Section 80EEA, gives first-time homeowners an expanded tax benefit. Only those who use a house loan to purchase a property in the affordable budget category are eligible for the benefits of Section 80EEA. To collect the benefits, learn more about Section 80EEA’s features and expanded benefits.

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For Indian first-time homebuyers, the Central Government’s “Housing For All” programme has provided numerous unique advantages. The Income Tax Act of 1961 established a number of tax-paying slabs and requirements that citizens must adhere to. One of these is Section 80EEA, which allows homebuyers to deduct an additional Rs 1.5 lakh in taxes off the loan portion of their purchase price.

What does Income Tax Act of 1961 Section 80EEA mean?

Any first-time home buyer in India is eligible for an additional tax deduction of up to Rs. 1.5 lakh under Section 80EEA. This deduction is in addition to the Section 24 standard deduction of Rs 2 lakh.

Who qualifies under Section 80EEA?

The Income Tax Act of 1961 only applies to people in this section. It is available to people who are already taking use of tax deductions in several fields. Companies, firms, partnerships, AOPs, HUFs, and other types of taxpayers are not permitted to make deductions under Section 80EEA.

What is the Section 80EEA’s maximum deductible amount cap?

The deductible amount of Section 80EE is the main point of introduction. The previous maximum deduction for interest paid to lending banks was Rs 50,000. Now, under Section 80EEA, a homebuyer can benefit from a tax deduction of up to Rs 1, 50,000.

Notably, the Central Government has permitted this tax deduction in addition to Section 24(B) of the Income Tax Act of 1961, which entitles a citizen to a tax deduction on a house loan of up to Rs 2 lakh. Simply said, by adhering to Sections 80EEA and 24 of the Internal Revenue Code, one may deduct up to Rs 3.5 lakh from taxes paid (B).

According to Section 80EEA, who are first-time homebuyers?

You must not own any other property in your name in order to be eligible for benefits under Section 80EEA.

Imposed restrictions on Section 80EEA

• This is true for mortgage loans that are secured by lending organisations (banking & non-banking financial companies)
• It only applies to first-time residential property buyers.
• It should be implemented and enforced between April 1, 2019, and March 31, 2022.
• The property’s assessed value for stamp duty purposes must be less than Rs 45 lakh.
• In urban areas and large cities, the restricted carpet area criterion is 60 square feet, whereas it is 90 square feet in other places.
• It is applicable to projects for low-income housing with approvals granted after September 1, 2019.

Extra benefits provided by Section 80EEA

For first-time homebuyers looking to invest in a new location and affordable housing projects, it is a highly desire programme. Additionally, it is not state in the 80EEA deduction for AY 2021–22 if a person must reside in a specific city. It follows that one can purchase real estate anyplace in India. In actuality, NRIs may also claim it (Non-resident Indians). Such reductions are also available for joint purchases. Owners making installment payments are qualified to apply for and receive advantages under Section 80EEA tax deductions on their own.

Section 80EE and Section 80EEA are different.

A tax deduction of up to Rs 50,000 could be request by first-time homebuyers under an earlier version of Section 80EE based on the interest they pay to lending institutions. It applied to those who applied for loans between April 1, 2016, and March 31, 2017. You can use the 80EE deduction up until the loan is paid off.

For consumers who took out house loans between April 1, 2019, and March 31, 2022, it is applicable. If owners meet all requirements outlined in the Income Tax Act, they are eligible to claim a deduction of Rs 1.5 lakh under section 80EEA.

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