Section 80EE of the Income Tax Act provides an additional deduction for interest paid on home loans taken for acquisition of a residential house property, specifically for first-time home buyers. This deduction is over and above Section 24(b) limit of ₹2,00,000.
It is aimed at encouraging home ownership among individuals, especially the middle-class segment.
Applicability – Who Can Claim?
The deduction under Section 80EE is available only to individuals. This means:
- HUFs, firms, companies, and AOPs are not eligible.
- The assessee must be an individual taxpayer.
Conditions to Avail Deduction under Section 80EE
The following conditions must be satisfied to claim this deduction:
| Condition | Explanation |
| 🔹Loan Sanction Period | The home loan must have been sanctioned between 1st April 2016 and 31st March 2017. (This provision has not been extended under Budget 2025) |
| 🔹Loan Amount Limit | The amount of the loan taken should not exceed ₹35,00,000. |
| 🔹Property Value Limit | The value (stamp duty value or cost) of the residential house should not exceed ₹50,00,000. |
| 🔹First-time Home Buyer | The individual should not own any residential house property at the time of sanction of the loan. |
| 🔹Loan from Recognized Entity | The loan must be taken from a financial institution or a housing finance company. |
✅ Amount of Deduction Available
- The maximum deduction available under Section 80EE is ₹50,000 per financial year.
- This is in addition to ₹2,00,000 deduction allowed under Section 24(b) for interest on housing loan (under the head “Income from House Property”).
Step-by-Step Process to Claim Deduction
🔹 Step 1: Check Eligibility
Ensure you satisfy all the conditions mentioned above — especially the loan date (2016–2017), loan amount, and property value.
🔹 Step 2: Obtain Interest Certificate
Get the interest certificate from the bank or housing finance company clearly stating:
- Total interest paid
- Break-up of principal and interest
- Loan sanction date and loan amount
🔹 Step 3: Calculate Deduction
- From the total interest paid, first claim ₹2,00,000 under Section 24(b) (if the property is self-occupied).
- Then, claim an additional ₹50,000 under Section 80EE, if eligible.
🔹 Step 4: File in ITR
While filing your Income Tax Return (ITR-1 or ITR-2), enter this deduction under the section:
“Deduction under Chapter VI-A – Section 80EE”
🔹 Step 5: Keep Documents Ready
No need to attach documents, but keep:
- Loan sanction letter
- Interest certificate
- Proof of house value (agreement/deed)
- PAN of lender, if asked
for verification, if any.
As perFinance Act 2025
- No amendment or extension has been made to Section 80EE.
- The deduction under Section 80EE is still available only for loans sanctioned between 1st April 2016 to 31st March 2017.
- New first-time homebuyers cannot claim deduction under Section 80EE unless their loan falls within this old time window.
⚠️Note: For home loans sanctioned after 1st April 2019, Section 80EEA (now expired) was applicable earlier, but no replacement provision has been introduced in Finance Act 2025.
✅ 7. Key Differences – Section 80EE vs Section 24(b)
| Feature | Section 80EE | Section 24(b) |
| Type of deduction | Additional benefit | Standard housing loan deduction |
| Maximum Limit | ₹50,000 | ₹2,00,000 (for self-occupied) |
| Property Type | Residential house only | Both self-occupied and let-out |
| Loan Sanction Period | 1 Apr 2016 – 31 Mar 2017 only | No such restriction |
| Ownership Condition | Must be first-time home buyer | No such restriction |
| Allowed under | Chapter VI-A | Income from House Property |