How to Claim Section 80EED Benefit When Buying a House in FY23

Income tax calculator: In the 2021 Budget, Union Finance Minister Nirmala Sitharaman had extended the tax benefit under Section 80EED until March 31, 2022, which allowed first-time home buyers to apply for a income tax exemption up to 1.50 lakh home loan interest payment in his EMI home loan, provided the price of the property is lower 45 million. But, that benefit was not extended in the 2022 budget, meaning new first-time home buyers 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 80EED of the Income Tax Act, Mumbai-based tax and investment expert Balwant Jain, said: “While the filing of the ITR from the next financial year, a taxpayer will not be able to claim an income tax benefit under Section 80EED of the Income Tax Act because this benefit terminates on March 31, 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 in the next fiscal year, when the benefit ends in the current fiscal year, Balwant Jain said, “ The benefit is still available until March 31, 2022. So if a taxpayer plans 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 fiscal year, i.e. before March 31, 2022. Having a home loan sanction letter within the given benefit period, one would be able to claim tax benefit even if they buy their home after some time, but within the given validity period of the approved home loan.”

Balwant Jain said the idea would only work for first-time home buyers and the price of the property must be lower 45 million.

To subscribe to Mint Bulletins

* Enter a valid email address

* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our app now!!

Comments are closed.