Now you will get an additional tax benefit of Rs 1.5 lakh on home loan payments.

Good news for you if you want to buy a new house. Government of India is giving you an additional tax benefit of up to Rs 1.5 lakh.

The government has introduced a new section in Budget 2019, Section 80EEA.

Under Section 80EEA, you will get an additional tax benefit of Rs 1.5 lakh on home loan interest payments. Note that this is in addition to the tax benefit of Rs 2 lakh (interest payment on home loan) available under Section 24. But there are certain conditions to get tax benefit under 80EEA.

What are the conditions for tax benefits under Section 80EEA?

Under Section 80EEA Rs. 1.5 lakh to get additional tax benefit, you have to fulfill these conditions.

  1. You get this tax benefit on paying home loan interest.
  2. Your home loan must have been approved between 1st April 2019 and 31st March 2020.
  3. The value of your house (stamp duty value) should be up to 45 lakhs.
  4. You should not have any house in your name while taking loan.

You can see that this new tax benefit is only for first-time home buyers.

You will not get this tax benefit only in FY2020. It will continue to be available in the future. As long as you fulfill the above conditions.

A tax benefit of Rs 2 lakh is available under section 24 on home loan interest. This new tax benefit (section 80EEA) is an additional tax benefit.

If you fulfill all the conditions, you can get a total tax benefit of up to Rs 3.5 lakh on interest payments.

What is the difference between the tax benefits of Section 24 and Section 80EEA?

  1. Both tax benefits are available on home loan interest.
  2. Under Section 24 tax benefit up to Rs 2 lakh is available. Under Section 80EEA, you get a tax benefit of up to Rs 1.5 lakh.
  3. Section 24 is available on all home loans. Only certain home loans are eligible under Section 80EEA. All terms and conditions are detailed above.
  4. You can avail benefits under section 24 only after the construction of your house is completed or you get possession. There is no tax benefit for under construction property. However, you can avail interest incurred during construction in 5 equal installments (after completion of construction). There is no condition of completion of construction for tax benefit of Section 80EEA.

Read on, Tax benefits available on home loan repayments

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