October 27, 2020

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Income Tax Software

Additional Home Loan Tax Deduction in Budget 2019 U/s 80EEA With Automated Arrears Relief Calculator U/s 89(1) with Form 10E from F.Y. 2000-01 to F.Y. 2019-20

Section 80EEA

Budget 2019 proposes
the insertion of section 80EEA to increase the benefit of Tax Deduction on the
interest paid towards home loan up to
Rs
45 lakhs for affordable housing. The additional tax deduction of Rs 1.50 lakhs
is for the home loan taken up to 3
1st March
2020. The cumulative benefit would be
Rs
7 lakhs for 15 years loan
.
Affordable Housing means a dwelling unit with carpet area
less than or equal to 60 square meters in metropolitan cities or 90 square
meter in cities or towns other than metropolitan cities of Bengaluru, Chennai,
Delhi National Capital Region (limited to Delhi, Noida, Greater Noida,
Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai
(whole of Mumbai Metropolitan Region).
Presently, in case of a self-occupied house, the benefit of
the tax deduction on the interest paid on home loan under section 24B is
restricted to
Rs 2 lakhs and on the principal repayment of the home loan the limit is Rs 1.50 lacs under section 80C.
Budget
2017 has capped the limit on the claiming of interest paid on home loan towards
rented or deemed to be let out houses. Earlier there was no restriction on the
home loan interest for the rented or deemed-let-out property. But after Budget
2017, loss from the rented or deemed let out property is restricted to
Rs 2 lakhs per annum. Thus, reducing the benefits of the
tax deduction on the interest paid on home loan for the second house
.

Bifurcation of Home Loan Tax Benefits

#
Section 80C: Under Section 80C, a deduction up to
Rs.1.50 lakhs for the home loan principal repayment.
#
Section 24B: Deduction of Interest Paid on a home loan up to
Rs 2 lakhs.
#
Section 80EEA: Additional benefit of tax deduction up to
Rs 1.50 lakhs, subject to the following conditions:
Conditions
for Additional Tax Deduction on Interest Paid towards Home Loan under section
80EEA
1.      The owner should be a First Time Home Owner.
2.     The
Home Loan shall be taken up to 31
st March
2020 i.e. from 1
st April 2019 to 31st March
2020.
3.     Home
Loan should be for affordable housing.
4.     The
registration value shall not exceed
Rs
45 lakhs
.
5.     The
benefit of the tax deduction is available from Assessment Year 2020-21 and so
on.
6.     The
total tax deduction is
Rs 3.50 lakhs for
the first time homeowners
.

Download Automated Income Tax Arrears ReliefCalculator U/s 89(1) with Form 10E from the F.Y. 2000-01 to F.Y. 2019-2020

 

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