Income tax return filing last date is knocking on your door. The last date for filing ITR for FY 2019-20 is December 31, 2020. To note is the fact that this deadline was extended due to the coronavirus pandemic to offer some relief to the taxpayers.
Coming back to the topic, the news is that if you took a housing loan in the current fiscal year and you are filing income tax returns too, then you can claim a deduction of Rs 1.5 lakh from this year under Section 80EEA.
This scheme was introduced back in 2019 in the Union Budget to help buyers find affordable homes. However, there are some conditions intact that you must be aware of.
In order to avail additional deduction, your home loan must have been sanctioned between 1 April 2019 and 31 March 2020.
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Moreover, the scheme is only for people who are first time home buyers and do not own any house as of the date of sanction of the loan. The stamp duty of the property can be up to 45 lakh. To note, this deduction is available over and above the 2 lakh deduction available under Section 24 (b) of the Income Tax Act.
One also needs to be mindful of the fact that one can’t claim the same interest as deduction under both Section 24 (B) as well as Section 80EEA. For example, if the interest you paid on the home loan for the year is 3.5 lakh, then you can claim Rs 2 lakh under Section 24 (b) and Rs 1.5 lakh under Section 80EEA. One should always claim the interest under Section 24 (b) first and the remaining under Section 80EEA.
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Also, those who have paid or accrued a home loan interest of Rs 1.5 lakh, can’t claim it under both Section 24 (b) and Section 80EEA. If a taxpayer has claimed a deduction of Rs 50,000 under Section 80EE, they are not eligible to claim the deduction under section 80EEA.
Recently, the Finance Ministry, in an attempt to ease the burden of home buying amidst the pandemic, announced income tax relief for buyers.
The one buying a house for the first time that costs up to Rs 2 crore will get income tax relief of up to 20 percent and this will be available till June 30, 2021.
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The Finance Minister announced doubling the differential between circle rate (stamp duty value) and agreement value (purchase value) for primary sale of residential units of up to Rs 2 crore, from 10 percent to 20 percent.
