Section 80ee and 80eea
Section 80EE vs 80EEA: Difference, Eligibility and Tax Benefits Explained
Section 80EE and Section 80EEA are tax benefits available for first-time homebuyers on home loan interest. The main difference is that Section 80EE allows a deduction of up to ₹50,000, while Section 80EEA offers a higher deduction of up to ₹1.5 lakh, subject to stricter conditions.
Both these deductions are over and above the ₹2 lakh limit under Section 24(b). However, you cannot claim both together. The right choice depends on your loan sanction date, property value, and eligibility.
Key Highlights:
-
- Section 80EEA offers higher deduction than 80EE
- Both are only for first-time homebuyers
- Cannot claim both together
- Applicable only under old tax regime
- Only interest portion is eligible
In this post, we will clearly explain the difference between Section 80EE and 80EEA, their conditions, and which one you should choose.
Let’s look at these sections in detail:Â
- Key Difference Between Section 80EE and 80EEA
- What Is Section 80EE?
- Conditions for Claiming the Deduction for Section 80EE
- Eligibility for claiming section 80ee deduction
- What Is Section 80EEA?
- Conditions for Claiming the Deduction for Section 80EEA
- Eligibility for Claiming Section 80EEA deduction
- Which is Better: 80EE or 80EEA?
- Common Mistakes & How to Avoid Them
- Can You Claim Both Section 80EE and 80EEA?
- How These Work with Section 24(b)
- Common Mistakes to Avoid
- Conclusion
- FAQs
Key Difference Between Section 80EE and 80EEA
|
Feature |
Section 80EE |
Section 80EEA |
|
Maximum Deduction |
₹50,000 |
₹1.5 lakh |
|
Property Value Limit |
Up to ₹50 lakh |
Up to ₹45 lakh (stamp duty value) |
|
Loan Amount Limit |
1 April 2016 to 31 March 2017 |
No limit |
|
Loan Sanction Period |
1 April 2016 to 31 March 2017 |
1 April 2019 to 31 March 2022 |
|
First-time Buyer |
Yes |
Yes |
|
Can Claim Together |
No |
No |
What Is Section 80EE?
Section 80EE of the Income Tax Act lets first-time homebuyers claim an extra tax deduction of up to ₹50,000 on the interest paid on their home loan.
Conditions for Claiming the Deduction for Section 80EE
There are the following terms and conditions for claiming the deduction for the section 80EE:
- This section is applicable only for the first time home buyers.
- You can avail the benefits up to Rs.50,000/- per financial year.
- The home loan amount cannot exceed the amount of Rs.35 lakh.
- The value of the house being purchased should not exceed the amount of Rs 50 lakh.
- You can’t claim the benefits on commercial property.
- Only the interest portion of the EMIs can be claimed as deduction.
- Home loans sanctioned between 1st April 2016 to 31st March 2017 are only eligible for the claim.
- The home loan has to be sanctioned by a Housing Finance Company or a Financial Institution.
- As on the date of sanction of loan, the taxpayer should not own any other house.
Eligibility for claiming section 80ee deduction
Before claiming section 80EE deduction, you need to know the following eligibility criteria:
- Only individuals are eligible for the claim under section 80EE on home/ property owned either jointly or single.
- Borrowers who are staying in a rented house, can also claim under the section 80EE.
- Hindu undivided family (HUF), Association of Person (AOP), companies, or any trust cannot claim under this section.
- This section is applicable on per person basis rather than per property basis
- That is not important for the taxpayer to reside in the property in order to claim a deduction under section 80EE.
This deduction can be claimed until the home loan prevails. The deduction can be claimed at the time of Income Tax Return Filing.
What Is Section 80EEA?
As per section 80EEA, an extended deduction on interest paid towards home loans is allowed for FY 2019-20 which was then extended to FY 2020-21 and FY 2021-22. This section allows deduction of up to Rs.1.5 lakh for interest paid by first-time home buyers for loans sanctioned from any financial institutions. This deduction can be claimed until you have repaid the home loan.
Conditions for Claiming the Deduction for Section 80EEA
There are the following terms and conditions for claiming the deduction for the section 80EEA:Â
- Only the first-time home buyer can claim for deduction and should not own any house property as on the date of sanction of loan.
- You can claim a maximum up to Rs.1.5 lakh from the taxable income as deduction under section 80EEA.
- Values of stamp duty of the house property should be maximum of Rs.45 lakhs.
- The housing loan should be sanctioned between 1st April 2019 and 31st March 2022.
- The taxpayer should not be eligible to claim deduction under section 80EE
- The deduction can be claimed on interest over and above section 24, which is Rs 2 Lakh.
Eligibility for Claiming Section 80EEA deduction
There are the following eligibilities for claiming section 80EEA deduction:
- Hindu undivided family (HUF), Association of Person (AOP), companies, or any trust can not claim under this section 80EEA.
- Only individuals are eligible for claim under section 80EEA on home/ property either joint or single.
- As like section 80EE, that it is not important for the taxpayer to reside in the property in order to claim a deduction under section 80EEA.
Which is Better: 80EE or 80EEA?
In most cases, Section 80EEA is more beneficial because it offers a higher deduction of ₹1.5 lakh compared to ₹50,000 under 80EE.
However, you can claim 80EEA only if:
- Your property value is within ₹45 lakh
- Your loan falls within the specified period
If you do not meet these conditions but qualify for 80EE, you can still claim that benefit.
Common Mistakes & How to Avoid Them
Even if you are eligible, many first time homebuyers make small mistakes while claiming 80EE and 80EEA. Here are some common ones and how you can avoid them:
- Do not claim 80EE or 80EEA if you are under the new tax regime. These deductions are allowed only in the old regime, so always check before filing.
- Check the loan sanction date carefully. Only loans approved within the given time period qualify. Loans outside these dates will not be accepted.
- Make sure the property value is within the limit. For 80EE it should be up to ₹50 lakhs, and for 80EEA the stamp duty value should not exceed ₹45 lakhs.
- If you have taken a loan from friends or family, you cannot claim this deduction. The loan must be from a bank or housing finance company.
- You cannot claim both 80EE and 80EEA for the same loan. Choose the one that applies to you.
- Always keep proper documents ready like the loan sanction letter, interest certificate and property papers. Without these, your claim may get rejected.
- First claim interest under Section 24(b), and then claim the extra benefit under 80EEA if applicable.
If you avoid these mistakes, your claim process will be smoother and chances of rejection will be much lower.
Can You Claim Both Section 80EE and 80EEA?
No, you cannot claim both.
- Section 80EEA is available only if you are not eligible for Section 80EE
- You must choose one section based on your eligibility
How These Work with Section 24(b)
You can claim:
- Up to ₹2 lakh under Section 24(b) for home loan interest
- Additional deduction under 80EE or 80EEA
This helps increase your total tax benefit.
How to Claim 80EE / 80EEA Deduction (Step-by-Step Process)
Example: Tax Saving Calculation
Let’s say:
- Total interest paid = ₹3 lakh
You can claim:
- ₹2 lakh under Section 24(b)
- Remaining ₹1 lakh under Section 80EEA
This reduces your taxable income significantly.
Common Mistakes to Avoid
- Claiming under the new tax regime (not allowed)
- Not checking loan sanction date
- Exceeding property value limit
- Taking loan from friends or relatives
- Trying to claim both 80EE and 80EEA
- Not keeping proper documents
Conclusion
Both Section 80EE and Section 80EEA give tax benefits on home loans, but they are not the same. It is important to know the difference between them before claiming the benefit.
Section 80EEA allows a higher deduction compared to 80EE. Also, the property value limit under 80EEA is a bit lower than 80EE.
If you clearly understand 80EE vs 80EEA, you can make better use of these benefits and reduce your tax amount.
That’s all we have for Section 80EE and 80EEA, which covers the deduction on interest paid for your housing loan.
If you have any doubts, questions or your own experience to share about this topic, please drop them in the comments below. We would love to hear from you!
FAQs
1.Can a borrower claim the deduction under Section 80EE if they are not residing in the house for which the benefit is availed?
Yes, a borrower can claim the deduction even if they are staying in a rented house. It is not required to stay at the same property on which the benefits are availed.
2.If a second residential house property is purchased in the subsequent year of the purchase of the first house, can the deduction under Section 80EE be continued to be claimed?
According to the law, the deduction u/s 80EE is allowed to purchase the residential house property for the first time. However, they should not possess any other or second house on the date of loan sanction from the financial institution. Hence, if another house is purchased subsequently, then the deduction under Section 80EE can continue to be claimed on the first house.
3.Can I claim Under Section 80EEA deduction every year?
Yes, you can claim the deduction of up to Rs.1.5 Lakhs yearly U/S 80 EEA on the portion of interest of your house loan EMIs.
4.Can a joint owner claim a deduction under section 80EEA separately?
Yes, a joint owner can claim the deduction U/S 80EEA separately.
5.Can I get a deduction for home loan interest payments U/S 80EE and 80EEA?
No, you can’t claim a deduction under both 80EE and 80EEA.
6.What happens if property value exceeds ₹45 lakh?
You cannot claim a deduction under 80EEA.
7.Is 80EEA available in the new tax regime?
No, it is available only under the old tax regime.
