Wondering if your home loan interest is taxable? The short answer is yes – the Income Tax Act provides some deductions for homebuyers. However, a prospective home loan applicant must take note of some terms to take advantage of this tax-deductible income. The time of application, as well as the sanctioned amount, affects the tax deduction.

Here’s what you need to know about the 80EE and 80EEA sections of the Income Tax Act.

What does Section 80EE mean?

If you’re a first-time home buyer and your home loan was sanctioned in FY 2013-14, FY 2014-15, or FY 2016-17, you are eligible for a deduction of up to ₹50,000 from your net taxable income as per the Section 80EE of the Income Tax Act.

Eligibility for claiming Section 80EE

• Section 80EE only allows individual borrowers to claim. However, you can claim this as a single or joint homebuyer.
• You can not claim an income tax deduction under Section 80EE if the homeowner is an Association of Persons (AOP), trust, a company, etc.
• You are eligible for a tax deduction even if you do not live in the purchased property.

Section 80EE: Terms and Conditions

• You can claim an income tax deduction as a first-time homebuyer under Section 80EE.
• The value of your purchased property must not exceed ₹50 Lakhs.
• The value of the home loan sanctioned must be less than ₹35 lakhs.
• You can claim the deduction only on the interest portion of the loan EMIs under Section 80EE.
• You cannot claim a tax deduction on loans sanctioned for commercial purchases.
• The home loan must have been sanctioned in FY 2013-14, FY 2014-15, or FY 2016-17.

What does Section 80EEA mean?

Section 80EEA replaced Section 80EE in FY 2019-20. As per the new update, the 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. The tax deduction under Section 80 EEA is deductible only on the interest portion of the home loan EMIs.

Section 80EE versus Section 80EEA: What is the difference?

The main difference between Section 80EE and 80EEA for home loan applicants is the time. Here’s a table to explain this difference better:

Terms	Section 80EE	Section 80EEA
Maximum deduction allowed	₹50,000	₹1,50,000
Time of Home Loan Sanction	FY 2013-14, FY 2014-15 and FY 2016-17	FY 2013-14, FY 2014-15 and FY 2016-17

In both cases, the deduction is only allowed on home loan EMIs.

Eligibility for claiming Section 80EEA

The eligibility criteria for claiming Section 80EEA is the same as Section 80EE.

• Section 80EEA only allows individual borrowers to claim. You can claim this as a single or joint homebuyer.
• You can not claim an income tax deduction under Section 80EEA if the homeowner is an Association of Persons (AOP), trust, a company, etc.
• You are eligible for a tax deduction even if you do not live in the purchased property.
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Section 80EEA: Terms and Conditions

• Section 80EEA only allows first-time homebuyers to claim an income tax deduction.
• A maximum deduction of ₹1.5 Lakhs is allowed from the net taxable income under Section 80 EEA.
• The carpet area of the property must not exceed 60 square meters (645 sq ft) if the property is in the metro cities.
• The carpet area must not exceed 90 square meters (968 sq ft) for properties in any other tier-2/ tier-3 cities or any other towns in India.
• You are eligible only if the stamp duty applicable on the property is ₹40 Lakhs or less.
• You are eligible only if the home loan was sanctioned in FY 2019-20 or FY 2020-21. 

FAQs

Can you claim a tax deduction under Section 80EEA every year?

If you availed of a home loan in FY 2020-21 and FY 2021-22, you are eligible for a tax deduction under Section 80EEA.

Can you claim a deduction as joint owners under Section 80EEA separately?

Yes, even joint owners can claim a tax deduction under Section 80EEA.

Are there any conditions for carpet areas under Section 80EEA deduction?

Yes, there are conditions for carpet areas under Section 80EEA of the Income Tax Act.

• For metro cities like Delhi, Mumbai, etc., the carpet area must cover 60 square (645 sq ft) meters.
• The carpeting requirement for tier-2/tier-3/ other cities is 90 square meters (968 sq ft).

Am I eligible for a Section 80EEA tax deduction as a new home loan applicant?

Yes. You are eligible for a Section 80EEA as a new home loan applicant. However, it also depends on the lending institution. For instance, at ApnaPaisa, a home loan officer will guide you with the tax deductions.

Section 80EE and Section 80EEA lessen the financial strain on home buyers. It is better to do some homework before applying for a home loan. Consider talking to experts like ApnaPaisa for a home plan that caters to your needs. It also helps to create a financial roadmap for your home loan application before taking it forward.