Check Section 80ee vs 80eea

Difference Between section 80ee and 80eea

Check deduction allowed, applicability, & conditions to avail Section 80ee/80eea

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Section 80EE and Section 80EEA of the Income Tax Act allow first-time homebuyers to claim deductions from their net taxable income. A maximum deduction of ₹50,000 and ₹1,50,000 can be claimed under Section 80EE and Section 80 EEA respectively on the interest portion of the home loan EMIs. This deduction is over and above the deduction claimed on the interest amount under Section 24(b) of the Income Tax Act. However, it is worth noting that you can claim a deduction only under one of Section 80EE and Section 80 EEA depending upon when your home loan was sanctioned.

Difference between Section 80EE and Section 80 EEA

You may refer to the table below for a quick comparison between Section 80EE and Section 80 EEA:

Particulars

Section 80EE

Section 80 EEA

Max Deduction Allowed

₹50,000 (only on the interest portion of the loan EMIs)

₹1,50,000 (only on the interest portion of the loan EMIs)

Applicability

Home loans availed in FY 2013-14, FY 2014-15 and FY 2016-17

Home loans availed in FY 2020-21 and FY 2021-22

Other Conditions

  • Only first-time individual homebuyers are eligible.

  • The value of the property must not exceed ₹50 Lakhs.

  • The loan amount must not exceed ₹35 Lakhs.

  • Only first-time individual homebuyers are eligible.

  • The carpet area of the property must not exceed 60 square metres ( 645 sq ft) for metro cities (see list of cities above).

  • The carpet area of the property must not exceed 90 square metres (968 sq ft) for other towns and cities.

  • The stamp duty paid must be ₹45 Lakhs or less.

Section 80EE- Deduction on Home Loan Interest

If you availed a home loan for your first house purchase in FY 2013-14, FY 2014-15, or FY 2016-17, you are eligible to claim a deduction of up to ₹50,000 from your net taxable income under the Section 80EE of the Income Tax Act. This deduction is over and above the deductions claimed under Section 24(b) and Section 80(c).

Terms for Claiming Income Tax Deduction Under Section 80EE

  • Only first-time homebuyers can claim income tax deduction under Section 80EE.

  • The value of the property must not exceed ₹50 Lakhs.

  • The value of the home loan availed must be less than ₹35 Lakhs.

  • You can claim the deduction only on the interest portion of the loan EMIs under Section 80EE.

  • The deduction can not be claimed on loans availed for commercial property.

  • The home loan must have been sanctioned in FY 2013-14, FY 2014-15, or FY 2016-17.

Eligibility for Claiming Income Tax Deduction Under Section 80EE

  • Only individual borrowers are eligible for claiming deduction under Section 80EE on property purchased either singly or jointly.

  • Association of Persons (AOP), Hindu Unified Families (HUF), trusts, companies, etc. can not claim income tax deduction under Section 80EE.

  • The taxpayer need not reside in the property in order to be eligible for the deduction.

Claiming Section 80EE Income Tax Deduction

A taxpayer who availed a housing loan for their first house purchase from a financial institution in FY 2013-14, FY 2014-15, or FY 2016-17 can claim a deduction of up to ₹50,000 under Section 80EE of the Income Tax Act. The deduction can be claimed at the time of filing the income tax return.

Section 80EEA - Deduction on Home Loan for Interest Paid 

Section 80EEA replaced Section 80EE in FY 2019-20. Under this section, homebuyers who purchased their first residential property in FY 2019-20 or FY 2020-21 can claim a deduction of up to ₹1,50,000 from their net taxable income. Just like Section 80EE, the deduction under Section 80 EEA also can be claimed only on the interest portion of the loan EMIs.

Terms for Claiming Income Tax Deduction Under Section 80 EEA

  • Only first-time homebuyers are eligible to claim income tax deduction under Section 80 EEA.

  • A maximum deduction of ₹1.5 Lakhs can be claimed from the net taxable income under Section 80 EEA.

  • The carpet area of the property must not exceed 60 square metres (645 sq ft) if the property is located in any of the following metro cities- Mumbai, Hyderabad, Bangalore, Kolkata, Chennai and Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad).

  • The carpet area must not exceed 90 square metres (968 sq ft) for properties located in any other town/city in the country.

  • The stamp duty applicable on the property must be ₹40 Lakhs or less.

  • The housing loan must have been availed in FY 2019-20 or FY 2020-21.

Eligibility for Claiming Income Tax Deduction Under Section 80 EEA

  • Only individual borrowers can claim deduction under Section 80EEA on property purchased either singly or jointly.

  • Association of Persons (AOP), Hindu Unified Families (HUF), trusts, companies, etc. can not claim income tax deduction under Section 80EEA.

  • Just as in Section 80EE, the taxpayer need not reside in the property in order to be eligible for the deduction under Section 80 EEA.

Section 80ee vs 80eea FAQs

  • ✔️Can I claim Section 80EEA deduction every year?

    Yes, you can claim a deduction of up to ₹1.5 Lakhs every year under Section 80 EEA on the interest portion of your house loan loan EMIs that is availed in FY 2020-21 and FY 2021-22.

  • ✔️Can joint owners claim deduction under section 80EEA separately?

    Yes, joint homeowners are eligible to claim the deductions under Section 80 EEA separately.

  • ✔️What are the conditions with respect to the carpet area of the property?

    Section 80EEA deduction can be claimed only if the carpet area of the property does not exceed:

    • 60 square (645 sq ft) metres for properties located in metro cities (Mumbai, Hyderabad, Bangalore, Kolkata, Chennai and Delhi NCR).

    • 90 square metres (968 sq ft) for properties located in any other town/city in the country.