Section 80EE- Income Tax Deduction for Interest on Home Loan
5paisa Research Team
Last Updated: 11 Dec, 2024 06:27 PM IST

Content
- What is Section 80EE?
- Who Can Claim Tax Deductions Under Section 80EE?
- How Much Can You Save Under Section 80EE?
- How is Section 80EE Different From Section 24(b)?
- Why First-Time Homebuyers Should Care About Section 80EE
- How to Claim Deductions Under Section 80EE?
- Section 80EE: A Boon for Smart Homebuyers
- Pro Tips to Maximize Section 80EE Benefits
- Conclusion
Investing in a home is not just an emotional journey; it’s a financial milestone that comes with its own set of perks under the Income Tax Act. If you're a first-time homebuyer, Section 80EE could be your best friend in saving taxes.
This lesser-known provision offers deductions on the interest paid on your home loan, adding significant relief to your tax burden.
In this article, let’s break down Section 80EE of the Income Tax Act in an easy-to-understand way and explore how it helps first-time homeowners
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Frequently Asked Questions
Section 80EE provides a deduction of up to ₹50,000 per financial year on the interest paid for a home loan, specifically for first-time homebuyers.
No, you cannot. Section 80EE is applicable only for first-time homebuyers and not following properties. Hence, deduction under this section cannot be claimed for the subsequent house property purchase in the same financial year or any other year.
No, Section 80EE deduction applies only when the borrower resides in the house property. If they are not residing in the house for which benefit has been availed, then no deduction can be claimed under this section.
Section 24(b) of Income Tax Act allows for a deduction of up to Rs 2 lakhs on interest payments toward the home loan. On the other hand, Section 80EE provides an additional deduction of up to Rs 1 lakh on interest payments made towards a home loan for first-time homebuyers.
The maximum amount of deduction that you can claim under Section 80EE is Rs 1 lakh in one financial year. Additionally, the loan amount shouldn't exceed Rs 35 lakhs, and the value of the house property shouldn't exceed Rs 50 lakhs.
Yes, if the property is co-owned and both borrowers meet the eligibility criteria, each can claim a deduction of ₹50,000 under Section 80EE.
Individual taxpayers who have taken a home loan for the first time between 1 April 2016 and 31 March 2017 are eligible for deduction under Section 80EE. In addition, the loan amount should not exceed Rs 35 lakhs, and the property's value should not exceed Rs 50 lakhs.
Yes! Section 80C allows deductions for principal repayment, while Section 80EE focuses on interest. You can claim both, provided you meet the conditions.
The maximum deduction is ₹50,000 per financial year, over and above Section 24(b)’s ₹2 lakh limit.
Unfortunately, loans sanctioned after this date are not eligible for Section 80EE benefits.
Yes, but the interest paid during the construction phase can only be claimed in five equal installments after completion.