Tax deduction for first time homeowners

Ask the Community Income Tax
1

Hi,

Is there any new rules for tax deduction for first time homeowners?

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2

If you are buying home first time, you are entitled to get Income Tax benefits on home loan under three sections- Section 80C, Section 24 and Section 80EEA of Income Tax Act. These sections of Income Tax Act let you avail home loan benefit of Rs 5 lakh annually.

Under section -80C
Max tax benefits -1,50,000
Tax saving component- Home Loan Principal and Stamp Duty
Condition- Property should not be sold within 5 years of possession
Under Section 24
Max tax benefits 2,00,000
Tax saving component-Home Loan Interest
Condition- Income Tax assessee or any family member should be living in that house, Full interest can be claimed if house is on rent
Under 80EEA
Max tax benefits 1,50,000
Tax saving component-Home Loan Interest
Condition- Stamp duty value of property should be up to Rs 45 Lakhs
Loan sanction date should be between 1st Apr 2019 to 31st Mar 2022
Assesse should not own any residential property till sanction of loan.
Should not be claiming any amount under income tax section 80EE.
Loan should be borrowed from Financial Institution only.

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3

Hi,

Can I claim deduction under Sections 24 and Section 80EEA simultaneously?
Also, What documents will I have to give to my company to claim tax deduction under Section 80EEA?

4

Nitin, You can claim deductions under both Sections 24 and Section 80EEA sections and enhance their total non-taxable income to Rs 3.50 lakhs, if they meet the eligibility criterion. However, deductions under Section 80EEA can only be claimed after exhausting the limit of Rs 2 lakhs under Section 24(b).

Submitting the interest certificate issued by bank will eb enough, to claim the rebate.