Deduction under section 80EEA & 80EEB

Section 80EEA & 80EEB of Income Tax Act, FY 2019-20


    Deduction u/s Section 80EEA: Interest on housing loan

    • Deduction in respect of interest paid on loan taken for acquisition of residential house property.
    • The government announced in union budget 2019 an incentive in the form of interest deduction under the objective of “housing for all”.
    • Deduction under the section allowed from financial year 2019-20 (AY. 2020-21).

     

    Who is eligible for taking deduction under section 80EEA?

    • This deduction is made available only to individuals; no such deduction is for HUF, AOP, Partnership firm and Company.
    • Individuals must have taken home loans for acquisition of residential house property.

     

    What are the conditions for claiming deduction under section 80EEA?

    • Following are the conditions which you need to satisfy in order to claim deduction:
    • The stamp duty value of the house for which you have taken home loan should be rupees 45 lacs or less.
    • On the date of sanction of loan, individuals should not own any other house property.
    • Loan should be taken from Financial Institutions (including Housing Finance Company).
    • The loan should be sanctioned between 1st April 2019 and 31st March 2020.
    • Individuals should not be eligible to claim deduction under section 80EE where the maximum deduction is rupees 50,000.

     

    What is the amount of deduction available under section 80EEA?

    • Maximum deduction available for the interest payment is up to rupees 150000.
    • The deduction is available in addition to deduction available under section 24(b).
    • Under section 24b interest deduction is available which is maximum rupees 200000.
    • So if an individual has taken home loan and is paying the interest then he has to first claim deduction under section 24b and for the excess amount he can claim deduction under section 80EEA.
    • Deduction under section 80EEA is continuously available until the loan gets repaid.

     

    Deduction u/s Section 80EEB: Interest on Electric Vehicle loan

    • Deduction in respect of interest payment on loan for purchase of electric vehicle.
    • The government announced in the budget 2019 an incentive in the form of an interest deduction under the objective of increasing the purchase of electric vehicles.
    • Deduction under this section allowed from financial year 2019-20 (AY. 2020-21).

     

    Who is eligible for taking deduction under section 80EEB?

    • This direction is made available only to individuals; no such deduction is available to HUF, AOP, partnership firm and Company.
    • Individuals must have taken a vehicle loan for purchase of an electric vehicle.

     

    What are the conditions for claiming deduction under section 80EEB?

    Following are the condition which you need to satisfied in order to claim deduction:

    • Individuals must have taken a vehicle loan for purchase of an electric vehicle.
    • The loan should be sanctioned between 1st April 2019 and 31st March 2023.
    • Loan should be taken from Financial Institutions.

     

    What is the amount of deduction available under section 80EEB?

    • Maximum deduction available for interest payment of upto rupees 150000.
    • Deduction under this section would be available from financial year 2019-20 (AY. 2020-21).
    • Deduction is continuously available until the loan gets repaid.

     

    Conclusion

    These two sections, Section 80EEA and 80EEB were announced in budget 2019 in order to give incentive to individuals who want their own home and government want to promote electric vehicles in the country.

    We can claim deduction under the section from financial year 2019-20 (Assessment year 2020-21) and in the subsequent years also by only fulfilling the conditions in the respective sections.


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