Income Tax Relief from House Building Loan Interest U/s 24(B) + 80EE + U/s 80EEA
Section 24 (B) (Loss under the head Income from House Property)
- From FY 2017-18, the Tax benefit on loan repayment of the second house is restricted to Rs 2 lakh per annum only (even if you have multiple houses the limit is still going to be Rs 2 Lakh only and the ceiling limit is not per house property).
- The unclaimed loss if any will be carried forward to be set off against house property income of the subsequent 8 years. In most of cases, this can be treated as ‘dead loss‘.
- I believe that this is a major blow to the investors who have bought multiple houses on home loan(s) with an intention to save taxes alone.
- Until FY 2016-17, interest paid on your housing loan is eligible for the following tax benefits ;
- Municipal taxes paid, 30% of the net annual income (standard deduction) and interest paid on the loan taken for that house are allowed as deductions.
- After these deductions, your rental income can be NIL or NEGATIVE and is called ‘loss from house property’ in the latter case.
- Such loss is currently allowed to be set off against other heads of income like Income from Salary or Business etc. which helps you to lower your tax liability substantially.
This was a new proposal which had been made in Budget 2016-17. The same will be continued in FY 2018-19 / AY 2019-20 too. First time Home Buyers can claim an additional Tax deduction of up to Rs 50,000 on home loan interest payments u/s 80EE. The below criteria has to be met for claiming tax deduction under section 80EE.
- The home loan should have been sanctioned during FY 2016-17.
- The loan amount should be less than Rs 35 Lakh.
- The value of the house should not be more than Rs 50 Lakh &
- The home buyer should not have any other existing resid
Section 80 EEA
Additional Tax Deduction of Rs 1.5 Lakh on Home loans to buy Affordable Property under new Section 80EEA
An additional income tax deduction of up to Rs. 1.5 lakh for interest paid on home loans borrowed during 01-04-2019 to 31-3-2020 has been proposed. This will be available under Section 80EEA. That takes the total deduction to up to Rs 3.5 lakhs (existing Rs 2 lakh limit + Rs 1.5 lakh new proposal). This new Tax deduction is applicable on loan is taken to buy a self-occupied ‘affordable housing property’ only. Properties costing up to Rs 45 lakh are considered affordable.
Besides the tax deductions under Section 80C and 24b, an individual can now claim up to Rs 1.5 lakh under Section 80EEA from FY 2019-20 or AY 2020-21 onwards, subject to below conditions;
- The home loan should have been sanctioned between 1st April 2019 to 31st March 2020.
- The loan should have been sanctioned by a Financial Institution.
- The Stamp duty value of the property should not exceed 45 Lakhs.
- The taxpayer should not own any other residential property on the date of loan sanction.
- This tax benefit will be available from 1st April 2020 (AY 2020-21) and till the end of the home loan tenure (closure).
- The total interest deduction is now Rs. 3.5 lakh (Rs 2 Lakh + Rs 1.5 Lakh).
Download And Prepare At a Time 100 Employees Automated Income Tax Form 16 Part B (Modified Format) [This Excel Utility Prepare At a time 100 Employees Form 16 Part B in New Format for A.Y. 2020-21]
1) Prepare At time 100 Employees Excel Based Form 16 Part A&B ( Modified Format of Form 16 Part B Vide CBDT Notification No.36/2019 Dated 12/04/2019 ]
2) All the Amended Income Tax Section have in this utility as per Budget 2019
3) You can print individual Form 16 Part Part B
4) Most easy to install just like an Excel File
5) Easy to Fill all column
6) Automatic Convert the Amount to the In-Words