Tax incentive for affordable housing (Union Budget 2019-2020)

A new section under 80EE of the IT act has been inserted in the Union Budget 2019-2020 to provide an impetus to affordable housing. An additional tax deduction of Rs. 1.5L has been provided on home loan interest for residential property from any financial institution subject to the following conditions.

  1. Loan was sanctioned between 1st April, 2019 to 31st March 2020
  2. Stamp duty value of the property should not exceed 45 Lakhs
  3. The taxpayer should not own any other residential property on the date of loan sanction
  4. This tax benefit is applicable from 1st April 2020 (AY 2020-21)
  5. If this additional deduction of 1.5L is claimed under the new section it cannot be claimed for tax benefit elsewhere.
  6. The total interest deduction is now Rs. 3.5 lakh

Definition of affordable housing

  1. Residential unit with carpet area less than or equal to 60 square meters in metropolitan cities or 90 square meter in cities or towns other than metropolitan cities of Bengaluru, Chennai, Delhi National Capital Region (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of Mumbai Metropolitan Region)
  2. Stamp duty value of the property should not exceed 45 Lakhs.

*Pl. refer budget document for accurate details. Information herein is only for reference purposes and is neither an investment advice nor authentic.