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Income Tax: After March 31, you will no longer be able to use this home loan benefit.
Income tax: Beginning April 1, 2022, the central government will eliminate the income tax credit under Section 80EEA for first-time house owners. In Budget 2019, the government promised an additional 1.50 lakh income tax credit for house loan borrowers who purchase their first home and pay stamp duty of up to 45 lakh. This facility was later extended for one more year in the budgets of 2020 and 2021, respectively.
According to tax and investment experts, if a new home loan borrower receives a home loan sanction letter by March 31, 2022, and receives disbursement in FY23, he or she will be able to claim this additional income tax exemption benefit on up to 1.5 lakh in home loan interest payments in one fiscal year for the entire term of the home loan.
Speaking on how an income taxpayer can still claim this benefit while filing an income tax return (ITR), Mumbai-based tax and investment expert Balwant Jain stated, “While filing ITR from next fiscal year, a taxpayer will not be able to claim income tax benefit under Section 80EEA as this tax benefit expires on 31st March 2022.”
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However, if a taxpayer is considering purchasing a dream home in the coming fiscal year, he or she can still take advantage of the income tax exemption on up to 1.50 lakh in home loan interest payments in a single fiscal year.”
Balwant Jain, highlighting the window of opportunity available to income taxpayers, stated, “If a house loan is sanctioned between April 1st, 2019 and March 31st, 2022, the borrower may claim income tax benefits under Section 80 EEA. So, if a new borrower receives a home loan sanction letter by March 31, 2022, and receives disbursement in the next fiscal year, he or she will be eligible to claim an income tax credit of up to 1.50 lakh on home loan interest paid in a single fiscal year under Section 80EEA.”
Pankaj Mathpal, MD & CEO at Optima Money Managers, agreed with Balwant Jain “This option will be offered to a home loan borrower for the duration of the loan if the borrower is a first-time buyer and does not own any property. Most importantly, this benefit is applicable on house loan EMI repayments for under construction properties as well, but under Section 24(b), a home loan borrower can claim income tax benefit on up to 2 lakh interest payments made after taking possession of the property.”
According to the income tax laws, a home loan borrower will receive two income tax benefits beginning April 1, 2022, under Sections 24(b) and 80C of the Income Tax Act. A home buyer can claim an income tax deduction of up to 2 lakh on the interest component of its home loan EMI under Section 24(b) in a single fiscal year. This advantage, however, can only be claimed after the property has been acquired. Borrowers can claim a tax deduction of up to 1.5 lakh on the principal amount paid through house loan EMIs under Section 80C.
According to the income tax laws, a home loan borrower will receive two income tax benefits beginning April 1, 2022, under Sections 24(b) and 80C of the Income Tax Act. A home buyer can claim an income tax deduction of up to 2 lakh on the interest component of its home loan EMI under Section 24(b) in a single fiscal year. This advantage, however, can only be claimed after the property has been acquired. Borrowers can claim a tax deduction of up to 1.5 lakh on the principal amount paid through house loan EMIs under Section 80C.