Income tax deduction | Budget 2021: Additional tax deduction of Rs 1.5 lakh for interest on home loan for affordable housing extended
The deduction of Rs 1.5 lakh in a monetary yr is out there underneath part 80EEA of the Income-tax Act, 1961. Deduction on cost of interest on a housing loan was launched in Budget 2019. This deduction is out there over and above the Rs 2 lakh deduction accessible on the interest cost on housing loan topic to sure circumstances. Thus, the overall deduction accessible to a person taxpayer on the interest cost of a housing loan for shopping for an affordable home is Rs 3.5 lakh in a monetary yr.
To avail the tax profit underneath this part, sure circumstances must be fulfilled that are as follows:
- Housing loan have to be taken from a monetary establishment corresponding to a financial institution or a housing finance firm for shopping for a residential home property.
- The home loan have to be taken between April 1, 2021 and March 31, 2022.
- Stamp obligation worth of the home property mustn’t exceed Rs 45 lakhs
- The particular person taxpayer shouldn’t be eligible to assert deduction underneath the prevailing Section 80EE.
- The taxpayer mustn’t personal any residential home property as on the date of sanction of the loan.
This deduction on interest cost is out there from gross whole earnings of the taxpayer thereby lowering the tax legal responsibility of a person taxpayer.
At current, for a self-occupied home, one can avail deduction on the principal quantity repaid on the home loan in addition to the interest paid on it. Under part 80C of the Income-tax Act, you get a deduction for the principal (of the loan) repaid as much as Rs 1.5 lakh a yr and the interest paid is deductible as much as Rs 2 lakh every year underneath part 24.
