Section 80EEA – Extra Deduction on Home Loan Interest for First-Time Buyers
Buying your first home is a milestone—and the government supports this dream with tax benefits. While Section 24(b) of the Income Tax Act provides ₹2 lakh deduction on home loan interest, first-time homebuyers get an additional ₹1.5 lakh under Section 80EEA.
That’s a total interest deduction of ₹3.5 lakh per year, if claimed correctly.
Let’s break down how Section 80EEA works, who can claim it, and how to include it in your ITR filing.
✅ What Is Section 80EEA?
Section 80EEA was introduced in Budget 2019 to boost affordable housing and help first-time homebuyers reduce their tax liability. It offers an additional deduction of up to ₹1.5 lakh on home loan interest, over and above the ₹2 lakh deduction under Section 24(b).
It’s available only for individuals (not HUFs or companies), and only for first-time buyers who meet specific criteria.
📋 Key Conditions to Claim Deduction Under Section 80EEA
To claim this deduction, all of the following conditions must be fulfilled:
- You must be a first-time homebuyer (no other residential property in your name on the date of loan sanction).
- Loan must be sanctioned between 1st April 2019 and 31st March 2022.
- Stamp duty value of the property must not exceed ₹45 lakh.
- Loan must be taken from a bank or housing finance company.
- You should not have claimed deduction under Section 80EE for the same loan.
- You must be eligible for deduction under Section 24(b) — 80EEA is an additional benefit, not a replacement.
💰 How Much Deduction Can You Claim?
|
Section |
Deduction Type |
Maximum Amount |
|
24(b) |
Home loan interest |
₹2,00,000 |
|
80EEA |
Additional home loan interest |
₹1,50,000 |
|
Total |
₹3,50,000 (combined) |
💡 This benefit is available every year until the loan is repaid, provided you continue to meet the conditions.
🧾 Example to Understand 80EEA
Let’s say:
- You took a home loan in May 2021 from HDFC Bank
- Stamp duty value of house = ₹42 lakh
- You are a first-time buyer
- Interest paid during the year = ₹3 lakh
You can claim:
- ₹2 lakh under Section 24(b)
- ₹1 lakh under Section 80EEA
- Total deduction = ₹3 lakh
If your interest was ₹4 lakh, you’d claim:
- ₹2 lakh under 24(b)
- ₹1.5 lakh under 80EEA
- Remaining ₹50,000 is not deductible
📦 Where to Show This in ITR
- Use ITR-1 or ITR-2, based on your income sources
- Report house property income, and claim deduction under 24(b)
- Under Chapter VI-A, mention deduction under Section 80EEA
Also, keep your:
- Interest certificate from lender
- Loan sanction letter
- Property documents for proof (in case of scrutiny)
🧠 People Also Ask
❓ Can I claim 80EEA in the new tax regime?
No. Section 80EEA is not allowed under the new tax regime (Section 115BAC). You must opt for the old regime to claim this benefit.
❓ Can co-owners claim 80EEA separately?
Yes—if both are co-borrowers and co-owners, and both individually meet all conditions, each can claim ₹1.5 lakh under 80EEA.
❓ Is 80EEA applicable on under-construction property?
Yes, but the interest must be paid during the year for a loan sanctioned within the eligible window, and possession must be received before claiming deduction.
❓ Can I claim 80EEA in addition to 80C?
Yes. 80EEA is in addition to deductions like 80C (for principal repayment), 24(b) (interest), and 80D (insurance), provided you qualify.
⚠️ Common Mistakes to Avoid
- Claiming 80EEA without checking property value limit
- Claiming 80EEA under the new tax regime (not allowed)
- Not verifying the loan sanction date
- Using loan from friends or private lenders (only banks/HFCs are allowed)
- Not claiming Section 24(b) first (80EEA works only if you’re eligible for 24(b))
🎯 Final Thoughts from a CA’s Desk
“Section 80EEA is a once-in-a-lifetime benefit—don’t miss it just because of poor documentation or wrong regime selection.”
With rising housing prices, this benefit is available only for affordable housing (below ₹45L)—so if you qualify, use it fully. Just make sure your ITR reflects the correct loan, interest, and ownership details.
📞 Need Help Claiming 80EEA or Calculating Total Home Loan Tax Benefits?
At CallmyCA, we help:
- Check eligibility for 80EEA 24(b)
- Calculate maximum allowable interest deduction
- File accurate ITR with housing loan disclosures
- Avoid tax notices due to mismatch or regime selection errors
👉 Click here to book your home loan deduction support via CallmyCA
