Union Budget 2021 Expectations for Income Tax: Additional tax benefit of Rs 1.5 lakh is available u/s 80EEA of the Income Tax Act along with the original deduction of up to Rs 2 lakh on home loan interest u/s 24 of the Act.
Union Budget 2020-21 Expectations for Income Tax: In the Union Budget 2019-20, Finance Minister Nirmala Sitharaman had announced additional tax benefit of up to Rs 1.5 lakh on interest paid on the loan taken for purchase of affordable homes. However, among others, one condition was that the affordable home should be purchased between April 1, 2019 and March 31, 2020.
Additional tax benefit of Rs 1.5 lakh is available u/s 80EEA of the Income Tax Act along with the original deduction of up to Rs 2 lakh on home loan interest u/s 24 of the Act.
To avail the additional interest of up to Rs 1.5 lakh, the following conditions are to be fulfilled:
- The loan has to be sanctioned during the period beginning the April 1, 2019 to March 31, 2020 by a financial institution.
- The stamp duty value of house property can’t exceed Rs 45 lakh.
- The applicant shouldn’t own any residential house property on the date of sanction of loan.
- The carpet area of the residential unit shouldn’t exceed 60 square meter in metropolitan cities like Bengaluru, Chennai, Delhi National Capital Region (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of Mumbai Metropolitan Region) or 90 square meter in cities or towns other than the above mentioned metropolitan cities.
People, who have purchased affordable houses fulfilling the above conditions, can claim total tax deductions up to Rs 3.5 lakh on payment of interest on home loan – Rs 2 lakh u/s 24 and Rs 1.5 lakh u/s 80EEA of the Income Tax Act.
With affordable houses in good demand among people with lower income, more people wish that the time limit for buying such houses is increased, so that the buyers may avail the tax benefits.
Builders of affordable houses also hope that extending the time frame of the tax benefit window would enhance the demand for the houses under this segment.