Tax Deduction Under Section 80EEA For Home Loan The 80EEA provision in India provides first-time homebuyers with an additional facility of income tax section relaxation. Any first-time house buyer in India is eligible for an additional tax deduction of up to Rs. 1.5 lakh under Section 80EEA of the Income Tax Act. Buyers can receive benefits & deductions under two Sections, namely 80EE and 80EEA deductions, when purchasing a house that is affordable and requires the backing of a home loan. Only the Section 80EEA Income Tax Act will be covered in this article.
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The Pradhan Mantri Awas Yojana (PMAY) flagship programme, with the goal of "Housing for All by 2022," was introduced in 2014. This was one of many measures implemented to promote property ownership. The 80EEA deduction was implemented in 2019 to support such projects further. This allowed the government to extend its assistance for home loans requested between April 1, 2019, and March 31, 2021, and ultimately until March 31, 2022. More & more people are now able to realize their dream of home ownership thanks to Section 80EEA.
Describe Section 80EEA. If a first-time home buyer purchases an inexpensive property in India, they are eligible for a deduction under Section 80EEA of up to Rs. 1.50 lakhs. This deduction exceeds Section 24's initial and fundamental deduction (b). The total annual tax benefits so approaches Rs. 3.5 lakhs. The buyer cannot own any other properties at the time of the purchase. Since only "affordable property" is eligible for the deductions, it is important to define what an affordable property is.
What is a housing unit that is affordable? On September 1st, 2019, the 80EEA Income Tax Act went into force. Before it, "affordable properties" were only up to $50,000 in value. With the implementation of Section 80 EEA, homes up to Rs. 45 lakhs fall within the new concept of "affordable housing" under the income tax code. The amount of carpeting a home has an impact on how affordable it is. To qualify for the Section 80EEA deduction, a property must not be larger than 60 square metres, or 645 square feet. For homes in other cities to qualify for the benefits of the same Section, they must not be larger than 90 square metres, or 968 square feet.
What requirements must be met to receive the benefit? A few requirements must be met in order to qualify for the tax relief provided by Section 80IA of the Income Tax Act. The list is as follows:
A loan from a financial institution or housing finance firm is required to buy a residential property. The individual cannot be making use of the deduction allowed by Section 80EE. The residential property's stamp duty must be 45 lakhs or less. The buyer must be making this purchase for the first time. He or she will be ruled ineligible for the Section 80 EEA deduction if they have any homes that are registered in their name. The house loan must be claimed between April 1, 2019, and March 31, 2021. In urban areas, a residential property's carpet area must be greater than 645 square feet, or 60 metres. In other cities, the residential plot's carpet area cannot exceed 968 square feet, or 90 metres.
Under Income Tax Act Section 80EEA, who may make a deduction claim? Only individuals buying their first home are eligible for the deduction. It is important to remember that a borrower cannot currently own any residential real estate in order to be eligible for a house loan.
Who is eligible to be classified as a first-time homebuyer? Those who do not already own any rental properties at the time they apply for a loan are considered first-time home buyers. Every household managed by a working adult can be considered a distinct one, regardless of whether the concerned person's parents are property owners.
Which cities qualify as metropolitan areas under the Section 80EEA Income Tax Act? Delhi, Bangalore Chennai, Faridabad, Ghaziabad, Greater Noida, Hyderabad, Gurugram, Kolkata, Noida, and Mumbai are among the metropolitan areas that qualify for tax deductions.
What is the deduction amount? A deduction on the principal amount up to Rs. 1, 50,000 is allowed under Income Tax Act Section 80 EEA. This qualifies in excess of the Rs. 2 lakh allowed under Section 24. (b). A taxpayer who complies with all the provisions of Section 80EEA of the Income Tax Act will therefore be eligible for a deduction of up to Rs. 3.5 lakh.
What time frame does Section 80EEA cover? The deduction is only available to borrowers whose loans were approved between April 1, 2019, and March 31, 2022.
What is the restriction described in Section 80EEA? A homeowner who has taken advantage of the deduction provided by Section 80EE is not eligible to take advantage of Section 80EEA.
How many times is the section 80EEA deduction limit? You can deduct expenses up until the point where your mortgage is paid in full. You are only allowed to deduct something once a year.
NRIs may or may not be eligible for the Section 80EEA deduction. Whether or whether one must be an Indian resident is not specified in the statute. As a result, non-residents can likewise claim the deductions allowed under Section 80EEA of the Income Tax Act, according to tax experts.
Can the deductions under Section 80 EEA be made in the event of a property that is not used for personal purposes? Nothing in the Section 80EEA deduction act specifies whether a property must be selfoccupied or not. As a result, buyers who live in rental properties can also receive the tax benefit.
Can co-owners make a claim for the Section 80EEA deductions? Each co-owner or joint borrower is qualified to claim the Rs. 1.5 lakh deduction under Section 80 EEA in the circumstances at hand. Each However, all of them must meet the conditions.
Differences between Section 24 and the 80EEA
Both Sections 80EEA and 24 are used to make the deduction claim. However, there are a few essential distinctions that must be drawn in this context. There is no requirement for possession in the case of section 80EEA deductions; however, you can request an exception once the interest payment process has begun. However, in order to claim the deduction under Section 24, you must really be in possession of the property. Under 80EEA, only home loans from different banks & financial institutions are a choice. However, as long as all the required paperwork is in order, borrowing money from friends & family is also allowed under Section 24. The primary difference between the two would be the amount of money at risk. For 24 A, the deduction is up to Rs 2,000,000. In the case of 80EEA, the deduction is limited to Rs 1, 50000.
The distinction between 80EEA & 80E Some individuals might mistake 80EEA for 80E. Find the distinction between the two below:80EEA The most that can be deducted is Rs. 1.5 lakh. No limit to the value of land The loan's sanction date must fall between April 1, 2019, and March 31, 2020.
80E The most that can be deducted is Rs. 50,000. Land shouldn't cost more than Rs. 35 lakh. The loan's sanction date must fall between April 1, 2016, and March 31, 2017, inclusive.
Facts to know about the 80EEA Income Tax Act Although technically this deduction is available until March 2022, if you match the qualifying requirements, you may still be able to claim the deductions and rebate for the whole loan period. If you are the only earner in a family, you may be regarded as having a separate home under the PMAY laws and regulations. You will also be seen as having a distinct household if you want to buy a home on your own, are financially independent, but are not married. As a result, you are now qualified to use section 80EEA of the Income Tax Act to deduct your first property purchase. A first-time home buyer is therefore qualified for a tax discount of up to Rs. 1.5 lakh under the 80EEA income tax act. This new law stimulates the expansion of the real estate market by piquing investors' first interest in purchasers.
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