Amended and updated notes on section 80EE of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to deduction in respect of interest on loan taken for residential house property.
Chapter VIA (Sections 80A to 80U) of the Income Tax Act 1961 deals with the provisions related to deductions to be made in computing total income. Section 80EE of IT Act 1961-2023 provides for deduction in respect of interest on loan taken for residential house property.
Recently, we have discussed in detail section 80E (deduction in respect of interest on loan taken for higher education) of IT Act 1961. Today, we learn the provisions of section 80EE of Income-tax Act 1961. The amended provision of section 80EE is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 80EE of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962, regulations, notifications, circulars, orders and Press Release by CBDT, Income Tax Department and the Ministry of Law and Justice, Government of India.
Section 80EE: Deduction in respect of interest on loan taken for residential house property
Section 80EE(1) of Income Tax Act
In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential property.
Section 80EE(2) of Income Tax Act
The deduction under sub-section (1) shall not exceed fifty thousand rupees and shall be allowed in computing the total income of the individual for the assessment year beginning on the 1st day of April, 2017 and subsequent assessment years.
Section 80EE(3) of Income Tax Act
The deduction under sub-section (1) shall be subject to the following conditions, namely:—
- (i) the loan has been sanctioned by the financial institution during the period beginning on the 1st day of April, 2016 and ending on the 31st day of March, 2017;
- (ii) the amount of loan sanctioned for acquisition of the residential house property does not exceed thirty-five lakh rupees;
- (iii) the value of residential house property does not exceed fifty lakh rupees;
- (iv) the assessee does not own any residential house property on the date of sanction of loan.
Section 80EE(4) of Income Tax Act
Where a deduction under this section is allowed for any interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other assessment year.
Section 80EE(5) of Income Tax Act
For the purposes of this section,—
- (a) “financial institution” means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies, or any bank or banking institution referred to in section 51 of that Act or a housing finance company;
- (b) “housing finance company” means a public company formed or registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes.