Tax payment is a moral and fiscal responsibility of every citizen. Governments of all countries use the taxes paid by citizens to formulate reform, growth and development policies. The government also offers various sorts of concessions and deductions on tax payments on various kinds of investments such as life insurance policies, health insurance policies, public provident fund, National Pension Scheme and so on. Since purchasing a home is also a major investment, the government offers several deductions on the repayment of home loans. Let us look at the tax deductions offered under section 80EE of Income Tax Act.
Let’s begin by understanding what Section 80EE of the IT Act is
If you are a first time home owner, repaying a home loan, then the IT Act makes provisions for you to claim deductions on the interest amount paid towards loan repayment. As per this Section of the IT Act, you may claim a maximum deduction of ?50,000 in a financial year on the interest component of your home loan. This amount can be claimed over and above the deductions offered under Section 80C and Section 24 of the IT Act, under which you can claim deductions of ?150,000 and ?200,000 respectively.
What are the terms and conditions for claiming deductions under this Section?
In order to claim deductions under Section 80EE, the following terms and conditions should be met:
What are the eligibility criteria for this deduction?
The following is the eligibility criteria for claiming deductions under Section 80EE of Income Tax Act:
As is evident, Section 80EE can facilitate a lot of savings on an annual basis. So, if you have an ongoing home loan that you are currently repaying, you should make the most of Income Tax Section 80EE. Ensure that you utilize the deductions offered under this Section and get the much required relief from tax payments.