Section 80EEA: Tax Benefits for Affordable Housing

Introduction: Section 80EEA was introduced in Budget 2019 to promote affordable housing by providing additional tax benefits on home loan interest for first-time home buyers. Eligibility Criteria: Available to individuals opting for the old tax regime. Resident and non-resident individuals can claim. Stamp duty value of the house must be up to INR 45 lakh. Loan must be from a financial institution or housing finance company.

Deduction Limit: Up to INR 1,50,000 annually on home loan interest. Can be claimed along with Section 24, providing a total benefit of up to INR 3,50,000 per year. Joint Ownership: Each co-owner can individually claim deduction if all conditions are met. House Property Conditions: Carpet area not exceeding 60 sqm in metro cities or 90 sqm in other cities. Applies to affordable housing projects approved after September 1, 2019.

Difference with Section 24: Section 80EEA allows an additional deduction specifically for first-time home buyers, over and above the INR 2 lakh limit under Section 24. Calculation Example: Mr. Raj bought his first home for INR 40 lakh with an annual interest payment of INR 2.5 lakh. Under Section 24, he can claim INR 2 lakh.

ITR Forms: Deduction can be claimed in ITR forms 1, 2, 3, or 4 based on income sources. Supporting Documents: Required documents include Form 16, home loan certificate, bank statements, and home loan sanction letter.