4 MinsFebruary 19, 2020
The Budget 2020 has extended the date of availing home loans under the affordable housing scheme to March 31, 2021, from the current deadline of March 31, 2020. This is one of the few tax exemptions that has been retained in this year’s
Budget and is likely to bring cheer to first-time homebuyers.
If you are considering buying a home, one option to look at is Axis Bank Home Loans which cater to all types of customers.
The July 2019 Budget had allowed a tax exemption of Rs 3.5 lakh for any interest paid for an affordable housing home loan. This was an increase of Rs 1.5 lakh from the
earlier limit of Rs 2 lakh.
Under Section 24 of the Income Tax Act, individual taxpayers were able to claim a deduction of Rs 2 lakh for interest payments. Under Section 80EEA, an additional deduction of Rs 1.5 lakh is available over and above the Section 24 limit. If taxpayers
can meet the conditions under Section 24 and Section 80EEA, they can avail of a total tax exemption of Rs. 3.5 lakh.
However, before you go out and start booking your dream home, here are a few points you need to keep in mind:
1. You have to be an individual home buyer to avail of this benefit. This exemption is not valid for any other taxpayer. So if you are a partnership firm, HUF (Hindu Undivided Family) or a company, you can't claim this benefit.
2. This exemption is valid only for first-time home buyers. If you have any residential property registered under your name on the date of sanction of the loan, you will not be allowed to claim this benefit.
3. Stamp duty value of the house/property can’t exceed Rs 45 lakh.
4. The loan should be sanctioned before March 31, 2021.
5. The individual taxpayer should not be eligible to claim deduction under the existing Section 80EE.
6. You have to take a housing loan from a bank or any other financial institution or a housing finance company/institution to buy a property for residential use only.
7. The carpet area of the residential property should not exceed 60 sq m. (about 645 sq ft) in metropolitan cities of Bengaluru, Chennai, Delhi National Capital Region (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad,
Kolkata, and Mumbai Metropolitan Region, and 90 sqm (about 968 sq ft) for homes in tier II and III cities and towns.
[Also Read: Home Loan for Constructing Your Dream House]
If two people acquire a property with a stamp duty value of Rs 50 lakh, they can't avail of this benefit because even though the individual value of their shares in the property might be less than Rs 45 lakh, the total cost of the house is more
than the prescribed limit. However, if two individuals own the property, say husband and wife, and both of them are paying instalments for the loan, both of them can claim this deduction. Provided, the stamp duty value is less than Rs 45 lakh
and the joint owners meet all the conditions individually.
One important point to note is that Section 80EEA doesn't specify that the homeowner should occupy the property to claim benefits. This means you can rent out your property and still claim benefits.
Axis Bank offers an array of affordable and flexible home loans designed to suit the requirements of all home buyers. Explore Axis Bank's wide range of products for the most competitive Home Loan interest rates,
extended loan tenures and other benefits such as EMIs waivers.
You can also use Axis Bank’s Home Loan affordability calculator that is based on your requirements, such as tenure, loan amount and interest rates to give you an estimate of your
Disclaimer: This article is written by The Source, a Mumbai-based content creation firm. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.