Income tax deduction for home buyers for the first time
NEW DELHI: If it's the first time you buy a house, you can claim the income tax benefit in Section 80EE of the Law on Income Tax. You can claim a deduction from income tax on interest paid on mortgage loans. But the amount allowed for the deduction is up to 50,000 rupees per financial year in this Section. Deductions can be claimed until you have fully repaid the mortgage loan.
The deduction under Section 80EE is available only to individuals. Other tax payers such as HUF, AOP, Company or any others can't claim the benefit under this section.
The deduction under Section 80EE is over and above the Rs 2 lakhs limit under the Section 24 of the Income Tax Act.
The government has set several conditions that you must satisfy before you go on to claim the benefit under Section 80EE , for example:
* It should be the first house you bought.
* The value of the house should be Rs 50 lakh or less
* The loan taken for the house must be Rs 35 lakh or less
* The loan must be sanctioned by a financial institution or a housing finance company
* As on the date of the loan sanction, no other house should be yours.