Amended and updated notes on section 80EEA of Income Tax Act 1961 as amended by the Finance Act 2020 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to deduction in respect of interest on loan taken for certain 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 80EEA of IT Act 1961-2020 provides for deduction in respect of interest on loan taken for certain house property.
Recently, we have discussed in detail section 80EE (deduction in respect of interest on loan taken for residential house property) of IT Act 1961. Today, we learn the provisions of section 80EEA of Income-tax Act 1961. The amended provision of section 80EEA is effective for financial year 2020-21 relevant to the assessment year 2021-22.
In this article, you will learn detail of the provisions of section 80EEA 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 80EEA: Deduction in respect of interest on loan taken for certain house property
Section 80EEA(1) of Income Tax Act
In computing the total income of an assessee, being an individual not eligible to claim deduction under section 80EE, 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 house property.
Section 80EEA(2) of Income Tax Act
The deduction under sub-section (1) shall not exceed one lakh and 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, 2020 and subsequent assessment years.
Section 80EEA(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, 2019 and ending on the 31st day of March, 2022;
- (ii) the stamp duty value of residential house property does not exceed forty-five lakh rupees;
- (iii) the assessee does not own any residential house property on the date of sanction of loan.
[The provisions of sub-section (3) of section 80EEA shall be amended (substituted) w.e.f. 01.04.2022 by the Finance Act 2021.]
Section 80EEA(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 80EEA(5) of Income Tax Act
For the purposes of this section,—
- (a) the expression “financial institution” shall have the meaning assigned to it in clause (a) of sub-section (5) of section 80EE;
- (b) the expression “stamp duty value” means value adopted or assessed or assessable by any authority of the Central Government or a State Government for the purpose of payment of stamp duty in respect of an immovable property.