Section 80EE: Deductions on Home Loan Interest for First Time Home Owners

For Financial Year 2013-14 and Financial Year 2014-15

This section provides a deduction on the home loan interest paid. The education under this section is available only to individuals for the first house purchased where the value of the house is Rs 40 lakh or less. And the loan taken for the house is Rs 25 lakh or less. The loan has to be sanctioned between 01.04.2013 to 31.03.2014. The aggregate deduction allowed under this section cannot exceed Rs 1,00,000 and is allowed for financial years 2013-14 & 2014-15 (Assessment year 2014-15 and 2015-16).

This deduction is not available for the financial year 2015-16 (Assessment year 2016-17).

For Financial Year 2016-17:

This section was revived in Budget 2016 and is applicable starting FY 2016-17. The deduction under this section is available only to an individual who is a first time home owner. The value of the property purchased must be less than Rs 50 lakh and the home loan must be less than Rs 35 lakh. The loan must be taken from a financial institution and must have been sanctioned between 01.04.2016 to 31.03.2017.

Under this section, an additional deduction of Rs 50,000 can be claimed on home loan interest. This is in addition to deduction of Rs 2,00,000 allowed under section 24 of the Income Tax Act for a self-occupied house property.

If you’re claiming this deduction in FY 2016-17, then you can continue to claim this deduction till the loan is repaid.

For Financial Year 2017-18:

This deduction is not available for the running FY 2017-18.