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24/09/2014

Deduction U/s 80EE - Deduction of Interest on Loan Taken for residential house property

Deduction in respect of interest on loan taken for residential house property [Section 80EE, applicable from assessment year 2014-15]

The provisions of Section 80EE are given below:-
The following conditions should be satisfied in order to claim deduction under Section 80EE-

  1. The assessee is an individual. He may be resident or non-resident.
  2. He has taken a loan.
  3. Loan is taken for acquisition of residential house property.
  4. Loan is taken from a bank or a housing finance company. Bank for this purpose means a banking company to which the Banking Regulation Act, 1949 applies including any bank or banking institution referred to in section 51 of that Act. A housing finance company means a public company formed or registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of residential house in India.
  5. Loan has been sanctioned by the bank/ housing finance company during April 1, 2013 and March 31, 2014.
  6. The amount of loan sanctioned for residential for residential property does not exceed Rs. 25 Lacs.
  7. The value of residential house property does not exceed Rs. 40 Lacs.
  8. The assessee does not own any residential house property on the date of sanction of loan.
Amount of Deduction: If the above conditions are satisfied, the assessee will be eligible for deduction under section 80EE. Deduction will be available in respect of interest payable on the above loan or Rs. 1 lac, whichever is less. Deduction will be available for the assessment year 2014-15. If, however, interest payable for the previous year 2013-14 (i.e. the assessment year 2014-15) is less than Rs. 1 lac, the balance shall be allowed as deduction for the assessment year 2015-16.

Double deduction not possible: If deduction is claimed under section 80EE, no deduction will be allowed in respect of such income under any other provision of the Act for the same or any other assessment year.

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