In Budget 2021, Union Finance Minister Nirmala Sitharaman had extended income tax benefit under Section 80EEA till 31st March 2022 that allowed home buyers (who do not own any house at the time of home loan sanction) to claim income tax exemption on up to ₹1.50 lakh home loan interest payment in one’s home loan EMI, provided the house property is priced below ₹45 lakh. But, this benefit hasn’t been extended in Budget 2022 that means new home buyers will have to pay more income tax from next financial year. However, if a taxpayer is mulling to buy home in net financial year, he or she can still avail this income tax benefit while filing one’s income tax return in next fiscal. What the home buyer need is to get its loan approved in current financial year and buy home in next financial year.
Speaking on how a home buyer can still avail income tax benefit under Section 80EEA of the income tax act, Mumbai-based tax and investment expert Balwant Jain said, “While ITR filing from next fiscal, a taxpayer won’t be able to claim income tax benefit under Section 80EEA of the income tax act as this benefit ends on 31st March 2022. However, in case, a taxpayer is mulling to buy its dream home next fiscal, it still has a chance to avail this benefit of income tax exemption on ₹1.50 lakh home loan interest payment in one financial year.”
On how an income tax payee repaying home loan EMI can claim the benefit for entire tenor of the home loan, when the benefit ends in current fiscal year, Balwant Jain said, “The benefit is still available till 31st March 2022. So, if a taxpayer is planning to buy its dream home in next financial year, it needs to apply for a home loan right now and get sanction letter before the end of this financial year i.e. before 31st March 2022. Having home loan sanction letter within the given period of the benefit, one would be able to claim income tax benefit under Section 80EEA for entire tenor of home loan even if they buy their home after some time but within the given validity period of the approved home loan.”
Balwant Jain said that the idea would work for those home buyers who don’t own any home at the time of home loan sanction and the house property price has to be below ₹45 lakh.