Income tax calculator: In the 2021 Budget, Union Finance Minister Nirmala Sitharaman had extended the tax benefit under Section 80EEA until March 31, 2022, allowing home buyers (who did not own any at the time of the sanction of the mortgage loan) to request an exemption from income tax until ₹1.50 lakh home loan interest payment in his EMI home loan, provided the price of the property is lower ₹45 million. But, this benefit was not extended in the 2022 budget, which means new homebuyers will have to pay more income tax starting next fiscal year. However, if a taxpayer plans to buy a house in the net fiscal year, they can still take advantage of this tax benefit while filing their tax return in the next fiscal year. What the home buyer needs is to get their loan approved in the current fiscal year and buy a home in the next fiscal year.
Speaking on how a home buyer can still get tax benefit under Section 80EEA of the Income Tax Act, Mumbai-based tax and investment expert Balwant Jain, said: “While filing the ITR from the next financial year, a taxpayer will not be able to claim income tax benefit under Section 80EEA of the Income Tax Act because this benefit ends on 31 March 2022. However, in the event that a taxpayer plans to purchase their dream home in the next fiscal year, they still have the option of availing this income tax exemption benefit. ₹1.50 lakh interest payment on home loan in one financial year.”
On how an income tax beneficiary who repays an EMI home loan can claim the benefit for the full term of the home loan, when the benefit ends in the current fiscal year, Balwant Jain has said: “The benefit is still available until March 31, 2022. So if a taxpayer is planning to buy their dream home in the next fiscal year, they should apply for a home loan now and get a sanction letter before the end of this financial year, i.e. before March 31, 2022. Having a home loan sanction letter within the benefit period, one could claim a tax benefit under Section 80EEA for the total duration of the home loan even if they buy their house after a certain time but within the given validity period of the approved home loan.
Balwant Jain said the idea would work for homebuyers who don’t own a home at the time of home loan sanction and the price of the property should be lower ₹45 million.
Never miss a story! Stay connected and informed with Mint. Download our app now!!