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Calculate Home Loan  FY 2019-20 AY 2020-21

Home Loan FY 2019-20

Home loan Deduction fy 2019-20

Home Loan: Every person dreams of his/her own house.Thus one has to buy a house on loan. And such  loan provides you tax deduction when we calculate the tax liability.

In this article you will learn how to take home loan deduction AY 2020-21.

Sections for HRA (House Rent Allowance)

In order take housing loan deduction, you must have knowledge about the sections relating Home loan,under Income tax acts.

There are three  sections that we follow while calculating qualifying amount.These are as follows:

  • Section 24B
  • 80EE
  • Section 80EEA
  • Section 80GG

Also read :

Penalty for e-filing belated return  2019

When HRA is a part of salary

If you are getting HRA in your salary,you can take Home loan deduction under sections 24B,,80EE and 80EEA.

Deduction Allowed Under section 24B

If you have got sanctioned  loan for home,then you are allowed  deduction of rs. 2 lakhs as home loan interest.

Also,principal amount of  loan if rs. Up to 1.5 lakhs under section 80c are deductible.

Conditions:

  • Deduction can be taken up to 5 years  or repaying the loan ,whichever is earlier, from the date of sanction of loan.
  • HRA must be a part of your salary.

Section 80EE : Additional deduction Of rs. 50,000

You can take an additional amount of rs. 50,000 as deduction under section 80EE for repayment of home loan interest.

Further ,it is over and above rs. 2 lakhs under 24B section.

But you have to follow the below conditions:

  1.   The loan must be sanctioned between 01.04.2016 to 31.03.2017.
  2.  Value of the house should be Rs 50 lakhs or less.
  3.  loan must be sanctioned by a Financial Institution or a Housing Finance Company.
  4. Amount of Loan taken for the house must be Rs 35 lakhs or less .
  5. As on the date of the sanction of loan, no other house property must be owned by you.
  6. This deduction (up to Rs. 50,000) is over and above the Rs 2 lakh limit under section 24 of the income tax act.
  7.  You can not avail deduction under both sections 80EE And 80EEA at the same time along with section 24.”

80EEA Section : Deduction of rs. 1.5 lakhs

Under section 80EEA, assessie can take deduction of rs. Up to 1.5 lakhs.

And it is over and above the 2 lakhs allowed under 24B section.

To take deduction,you must follow the conditions below:

  1. Time period starts from FY 2019-20 Onwards.
  2. The concerned individual taxpayer should not be eligible to claim any deductions under the existing Section 80EE of the Income Tax Act.
  3.  Stamp duty value of such property must not cross 45 lakhs.
  4.  Loan must be for residential house, not for consruction of residential house.
  5. the assessee should not own any residential house properties on the date of sanctioning the home loan.”

Example to take Home loan deduction

Suppose,you have taken  loan of rs. 20 lakhs for buying home.And your principal amount of loan is 10 lakhs.

And home loan interest for fy 2019-20 is 4 lakhs.

So suppose the loan is sanctioned from 1st April 2019 onwards.

In such a situation,you are allowed rs. 2 lakhs under section 24B.

And as loan is sanctioned from the start of fy 2019-20,you can get 1.5 lakhs more .

Thus in total you can get deduction of rs. 3.5 lakhs from the  loan interest part for home.

Key Note:

You can not take deduction benefit under 80EE and 80EEA at the same time,rather by pairing each of these with section 24B.

Firstly,exhaust the limit of rs. 2 lakhs under section 24B then go for 80EE or 80EEA,whichever one is applicable to you.

When your salary not containing HRA(House Rent Allowance)

If your salary doesn’t contain HRA component,you can only take deduction under Section 80GG.

But how ?

Let’s take a quick look :

The qualifying amount of deduction under section 80GG is least of the three  conditions:

  • Rs. 60,000 annually.
  • Rent paid – 10% of AGI.
  • 25% of AGI.

NOTE : here AGI means adjusted gross income.That is ,the gross income -Exempted allowances – standard deduction- 80C to 80U

 

Kuldeep Singh
 

is a professional blogger,teacher and income tax expert

Click Here to Leave a Comment Below 2 comments
Prashanth Yadav - October 1, 2019

Nice post

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