* The
amount of home loan sanctioned for acquisition of the residential house
property does not exceed Rs. 25 lakh
* The value of the residential house property
does not exceed Rs. 40 lakh
* The assessee does not own any residential
house property on the date of sanction of the loan.
* The loan
is sanctioned by the financial institution / bank during the period beginning
on 1st April, 2013 and ending on 31st March, 2014.
* The
deduction under sub-section shall not exceed Rs. 1 lakh and shall be allowed in
computing the total income of the individual for the assessment year beginning
on the 1st day of April, 2014 and in a case where the interest payable for the
previous year relevant to the said assessment year is less than Rs. 1 lakh, the
balance amount shall be allowed in the assessment year beginning on the 1st day
of April, 2015.
Existing Deduction..! :
Under the existing
provisions of section 24 of the Income-tax Act, income chargeable under the
head Income from House Property’ is computed after making the deductions
specified therein.
The deductions
specified under the afore said section are as under..!-
* A sum equal to thirty per cent of the annual
value;
* Where the property has been acquired,
constructed, repaired, renewed or reconstructed with borrowed capital, the
amount of any interest payable on such capital.
It has also been
provided that where the property consists of a house or / part of a house which
is in the occupation of the owner for the purposes of his /her own residence or
/ can not actually be occupied by the owner by reason of the fact that owing to
his / her employment, business or / profession carried on at any other place,
he /she has to reside at that other place in a building not belonging to him /
her, then the amount of deduction as mentioned above shall not exceed Rs. 1.5
subject to the conditions provided in the said section.
New section
Income-tax 80EE..!
Keeping in view the
need for affordable housing, an additional benefit for first-home buyers is
proposed to be provided by inserting a new section 80EE in the Income-tax Act
relating to deduction in respect of interest on loan taken for residential
house property.
The proposed new
section 80EE seeks to provide that in computing the total income of an
assessee, being an individual, there shall be deducted, in accordance with and subject to the
provisions of this section, interest payable on home loan taken by him / her
from any financial institution / bank for the purpose of acquisition of a
residential house property.
It is further
provided that the deduction under the proposed section shall not exceed Rs. 1
lakh and shall be allowed in computing
the total income of the individual for the assessment year beginning on 1st
April, 2014 and in a case where the interest payable for the previous year
relevant to the said assessment year is less than Rs. 1 lakh, the balance
amount shall be allowed in the assessment year beginning on 1st April, 2015.
Conditions...!
It is also provided
that the deduction shall be subject to the following conditions..!-
* The loan is sanctioned by the financial
institution / bank during the period beginning on 1st April, 2013 and ending on
31st March, 2014;
* The amount of loan sanctioned for acquisition
of the residential house property does not exceed twenty-five lakh rupees;
* The value of the
residential house property does not exceed forty lakh rupees;
* The assessee does not
own any residential house property on the date of sanction of the loan.
* It is also provided
that where a deduction under this section is allowed for any assessment year,
in respect of interest referred to in sub-section (1), deduction shall not be
allowed in respect of such interest under any other provisions of the
Income-tax Act for the same or / any
other assessment year.
It is also proposed
to define the term “financial institution”.
This amendment will
take effect from 1st April, 2014 and accordingly apply in relation to the
assessment year 2014-15 and subsequent assessment year.
‘80 EE. ( 1 ) In computing the total income of
an assessee, being an individual, there shall be deducted, in accordance with
and subject to the provisions of this section, interest payable on home loan
taken by him / her from any financial institution for the purpose of
acquisition of a residential house property.
( 2 ) The deduction under sub-section ( 1 )
shall not exceed Rs. 1 lakh and shall be allowed in computing the total income
of the individual for the assessment year beginning on the 1st day of April,
2014 and in a case where the interest payable for the previous year relevant to
the said assessment year is less than Rs. 1 lakh, the balance amount shall be
allowed in the assessment year beginning
on the 1st day of April, 2015.
(3) The deduction under sub-section ( 1 )
shall be subject to the following conditions, namely:—
(i) The home loan has been sanctioned by the
financial institution / bank during the period beginning on the 1st day of
April, 2013 and ending on the 31st day of March, 2014;
(ii) The amount of loan sanctioned for
acquisition of the residential house property does not exceed Rs. 25 lakh
(Twenty-five lakh);
(iii) The value of the residential house
property does not exceed Rs. 40 lakh (Rs. Forty lakh rupees);
(iv) The assessee
does not own any residential house property on the date of sanction of the
loan.
(4) Where a deduction under this section is
allowed for any interest referred to in sub-section ( 1 ),deduction shall not
be allowed in respect of such interest under any other provisions of the Act
for the same or any other assessment year.
(5) For the purposes of this section,—
(a) “financial institution” means a banking
company to which the Banking Regulation Act, 1949 applies including any bank or
banking institution referred to in section 51 of that Act or a housing finance
company;
(b) “housing finance company” means a public
company formed or registered in India with the main object of carrying on the
business of providing long-term finance for construction or / purchase of
houses in India for residential purposes.’.
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