As per the income tax rules, from 1st April 2022, a home loan borrower will get two income tax benefits under Section 24(b) and Section 80C of the Income Tax Act.
Income tax : A home loan borrower can claim tax benefit under Section 80 EEA, if it has a home loan sanctioned in between 1st April 2019 to 31st March 2022
Income tax: From 1st April 2022, central government is going to discontinue income tax benefit under Section 80EEA to first time home buyers. In Budget 2019, center had announced an additional ₹1.50 lakh income tax benefit to home loan borrowers, who buy their first property having stamp duty valuation up to ₹45 lakh. Later in budget 2020 and 2021, this facility was extended for one more year respectively. However, according to tax and investment experts, if a fresh home loan borrower gets home loan sanction letter by 31st March 2022 and gets disbursal in FY23, he or she would be able to claim this additional income tax exemption benefit for entire tenure of the home loan.
Speaking on how an income taxpayer still has an opportunity to claim this benefit while filing income tax return (ITR); Mumbai-based tax and investment expert Balwant Jain said, “While filing ITR from next financial year, a taxpayer will not be able to claim income tax benefit under Section 80EEA as this tax benefit ends on 31st March 2022. However, in case, a taxpayer is mulling to buy its dream home next fiscal, it still has a chance to avail this benefit of income tax exemption on up to ₹1.50 lakh home loan interest payment in single financial year.”
Highlighting the window of opportunity available for an income taxpayer, Balwant Jain said, “A home loan borrower can claim income tax benefit under Section 80 EEA, if it has a home loan sanctioned in between 1st April 2019 to 31st March 2022. So, if a new borrower receives home loan sanction letter by 31st March 2022 and gets disbursal in next fiscal, he or she will be eligible to claim income tax benefit on up to ₹1.50 lakh home loan interest paid in one financial year under Section 80EEA.”
Echoing with Balwant Jain’s views; Pankaj Mathpal, MD & CEO at Optima Money Managers said, “This facility will be available for a home loan borrower for entire tenure of the home loan provided the borrower is a first time buyer and he or she doesn’t own any property. Most importantly, this benefit is available on under construction property’s home loan EMI repayment as well whereas under Section 24(b), a home loan borrower can claim income tax benefit on up to ₹2 lakh interest payment after getting possession of the property.”
As per the income tax rules, from 1st April 2022, a home loan borrower will get two income tax benefits under Section 24(b) and Section 80C of the Income Tax Act. Under Section 24(b), a home buyer can claim income tax deduction on up to ₹2 lakh in one financial year on the interest component of its home loan EMI. However, this benefit can be claimed after getting possession of the property. Under Section 80C, borrowers can avail a tax benefit of up to ₹1.5 lakh on the principal amount paid through home loan EMI.
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