In Budget 2013, New Section 80EE, has been introduced. Benefit of section 80EE is available for new home loan buyer
Highlights of Section 80EE are:
- Additional deduction is available to only Individuals.
- Benefit of Section 80EE available only, if you have no existing house, in your name.
- You have bought a new house, and House cost of the house is maximum of Rs 40 lakhs
- Loan is approved and taken after 1-4-2013,
- Loan does not exceed Rs 25 Lakhs
- Then, the Extra interest deduction that you will get is Rs 1,00,000/- under section 80EE.
- This “temporary” scheme is for 1 year only.
- Benefit for section 80EE is available for fresh investment for “First time house buyers”
Details of section 80 EE is given here:
The proposed new section 80EE seeks to provide that in computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property.
It is further provided that the deduction under the proposed section shall not exceed one lakh rupees and shall be allowed in computing the total income of the individual for the assessment year beginning on 1st April, 2014 and in a case where the interest payable for the previous year relevant to the said assessment year is less than one lakh rupees, the balance amount shall be allowed in the assessment year beginning on 1st April, 2015.
It is also provided that the deduction shall be subject to the following conditions:-
(i) the loan is sanctioned by the financial institution during the period beginning on 1st April, 2013 and ending on 31st March, 2014;
(ii) the amount of loan sanctioned for acquisition of the residential house property does not exceed twenty-five lakh rupees;
(iii) the value of the residential house property does not exceed forty lakh rupees;
(iv) the assessee does not own any residential house property on the date of sanction of the loan.
It is also provided that where a deduction under this section is allowed for any assessment year, in respect of interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provisions of the Income-tax Act for the same or any other assessment year.
It is also proposed to define the term “financial institution”.
This amendment will take effect from 1st April, 2014 and accordingly apply in relation to the assessment year 2014-15 and subsequent assessment year.