The new financial year has brought in the implementation of new income tax regulations. While many of these regulations will affect various aspects of investments, one such regulation that will leave the potential borrowers disappointed, especially in the affordable housing segment, is the non-extension of an additional tax benefit under Section 80EEA.
Curious about the Section 80EEA? Read this article to know and how will this affect you.
What is Section 80EEA and its Benefits?
Section 80EEA of the Income Tax Act 1961 provides an additional tax rebate of up to INR 1.5 lakhs on home loan interest paid. This tax benefit on home loan interest is over and above INR 2 lakhs under Section 24. Section 80EEA provides home loan tax benefits to first-time homebuyers whose property’s value is less than INR 45 lakhs.
However, this benefit is applicable only if your home loan is sanctioned between April 1, 2019 and 31st March 2022. As per the Union Budget 2022, potential borrowers lose this benefit even if their loan is sanctioned on April 1, 2022. But, if you have received the home loan sanction letter before April 1, 2022 and your property’s worth is less than INR 45 lakhs, you can still claim tax benefit on your home loan interest under this section.
Though non-extension of the benefit may be a dampener of sorts, there are other provisions of the Income Tax Act 1961 that offer comprehensive Home Loan tax benefits. While Section 80C provides tax rebate on home loan principal of up to INR 1.5 lakhs, Section 24 provides tax relief on interest paid. Online calculators can help you calculate tax benefits on your home loan.
Planning Finances Without Section 80EEA Benefits
With this non-extension ruling, you may have lost the chance to secure benefits under Section 80EEA and save money, but there is a way to counter the absence. Apply for a joint home loan to maximise tax benefits. When you apply for a joint home loan, both borrowers are eligible for tax benefits. And then, there are advantages too. To know more, click here.
Home loans not only help you buy your dream home, but the associated tax benefits also aid in lowering your tax outgo. Utilise the different sections of the Income Tax Act to maximise tax benefits from your home loan and plan your finances for a better and secure tomorrow!
Godrej Capital is the financial services arm of Godrej Group which offers home loans, Loan Against Property and other secured loans. With innovative products and offerings, customers can get hassle-free loans on easy terms and conditions. Click here to know more about the offering.
Disclaimer: The above information is for illustrative purpose only. For more details, please refer to the product or service document and/or connect with our customer representative prior to making any financial decision.