Section 80EE: Additional Interest Deduction on House Property Loan

Finance Minister presented Union Budget 2013-14 in parliament. In the Union Budget 2013-14 a new Section 80EE inserted in Indian Income Tax, 1961 for additional deduction of interest on housing loan. An assessee able to take additional interest deduction on housing loan from Assessment Year 2014-15

Additional Interest deduction on house property loan will be allowed on only to new loan sanctioned for house property. The loan sanctioned for house property does not exceed from 25 lakhs. Loan has been sectioned from 01-04-2013 to 31-03-2014. If the loan has been sanctioned before 01 April, 2013 than assessee not able to take benefit of Section 80EE of India Income Tax, 1961

A Brief Summary:

1. Loan has been sanctioned for house by any financial institutions from 01 April, 2013 to 31 March, 2014.

2. Loan amount sanctioned for acquisitions house property does not exceed Rs. 25 Lacs.

3. There are no other house property on the date of sanction housing loan to assessee.

4. Value of house property not exceed of Rs. 40 lacs.

5. Buyer of house property is the first time buyer.

Note: - This is a brief disclosure on Addition Interest Deduction House Property Loan under Section 80EE and under Section 24 (b) of India Income Tax Act, 1961.

Section 80E : Deduction for Interest on Education loan

Q. Who is eligible for deduction u/s 80E?

A. Loan should be taken by individual for pursuing higher education of self, spouse or his /her Children’s. Hence parents are also eligible to claim deduction of interest paid by them on loan taken for their children’s education. This deduction is not available to HUF.

Q. What is eligible amount?

A. Only interest paid on an educational loan is allowed as deduction u/s. 80E of The Income Tax Act, 1961, out of his/her income chargeable to tax i.e. Deduction will be allowed only when actual interest is paid.

Q. How much amount is deductible?

A. There is no limit for amount of repayment of interest. Unlimited amount of interest can be deducted under this section. However there is no benefit available on the repayment of principal amount of the loan. The assesse can claim the amount of interest in the initial assessment year & carry forward up to 7 assessment years.

Deduction is allowed for a continuous period of eight years, starting with initial assessment year in which the assessee  starts paying the interest on the loan or until the interest is paid in full whichever is earlier. 

Q. Can loan be taken for any education?

A. The loan should be taken for the purpose of higher education.

Q. Can higher studies be pursued outside India?

A. There is no condition that the course should be in India.

Q. Can loan be taken from relatives?

A. The loan should be taken from any financial institution or any approved charitable institution. Interest on Loan taken from relatives or friends will not be eligible for deduction under section 80E.


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