Buying a house in India is not easy. Property prices are high, home loans run for decades and the interest burden feels endless. To reduce this financial stress, the government provides certain tax benefits. One of such benefits is Section 80EE of the Income Tax Act, which helps first-time homebuyers to save some extra tax.
But not everyone can claim it. Section 80EE has some specific rules and conditions. In this blog, let’s understand in simple words who is eligible for Section 80EE, how it works and how you can claim it.
What is Section 80EE?
Section 80EE permits taxpayers to claim an extra deduction of up to the limit of ₹50,000 per year on home loan interest.
This is in addition to the normal deduction of ₹2,00,000 allowed under Section 24(b).
So, in total, you can claim up to the limit of ₹2,50,000 as interest deduction in a year.
The deduction continues every year until the loan is fully paid off if you meet the eligibility rules.
In short, Section 80EE helps you save more tax if you are buying your first house.
Eligibility for Section 80EE
To claim this benefit, you must meet the following conditions:
1. Only Individuals Can Claim
- Available only for individuals.
- Not allowed for HUFs, companies, or firms.
2. First-Time Homebuyer
You should not own any other house at the time your loan is sanctioned.
3. Loan Sanction Period
- Loan must be sanctioned between 1st April 2016 and 31st March 2017.
- Once eligible, you can keep claiming it in later years until your loan ends.
4. Loan Amount Limit
The loan should not be more than ₹35 lakh.
5. Property Value Limit
The house you buy should not cost more than ₹50 lakh.
6. Loan from Bank/Housing Finance Company
- Loan must be from a recognized bank or housing finance company.
- Loans from relatives or friends will not qualify.
Key Features of Section 80EE
- Deduction limit: Up to ₹50,000 every year
- Over and above Section 24(b)
- No restriction on property use – benefit can be claimed even if the house is rented out
- Can be claimed every year till the loan is repaid
Example
Let’s take an example:
- Mr. Arjun bought his first house in June 2016
- Loan: ₹30 lakh (within ₹35 lakh limit)
- Property value: ₹45 lakh (within ₹50 lakh limit)
- Loan sanctioned: May 2016 (within timeline)
- Interest paid in FY 2024–25 = ₹2,60,000
How much deduction can he claim?
- Section 24(b): ₹2,00,000
- Section 80EE: ₹50,000
- Total deduction = ₹2,50,000
So, Arjun gets the maximum tax benefit.
How to Claim Section 80EE?
- Check eligibility (loan period, amount, and property value).
- Collect documents (loan sanction letter, bank interest certificate, property papers).
- While filing ITR, claim the deduction under Section 80EE.
- Salaried individuals should also submit loan details to their employer for TDS adjustment.
Why Section 80EE is Important?
- Encourages first-time homebuyers
- Makes homes affordable for middle-class families
- Provides tax relief to reduce EMI pressure
Even though it was introduced only for a specific loan sanction period, it still helps many people today.
Section 80EE vs Section 80EEA
Many people confuse the two. Here’s the difference:
- Section 80EE: ₹50,000 deduction for loans sanctioned between 1st April 2016 and 31st March 2017, for property value up to the limit of ₹50 lakh.
- Section 80EEA: ₹1,50,000 deduction, for loans sanctioned between 1st April 2019 and 31st March 2022, property value up to the limit of ₹45 lakh.
Both cannot be claimed together. If you qualify for 80EEA, you cannot claim 80EE.
Practical Insights for Homebuyers
Many people wonder if Section 80EE is still relevant since it was meant only for the loans sanctioned during 2016–17. The answer is yes, it is still useful, but only for those who took loans during that period. If you bought a house later, you may qualify under Section 80EEA instead.
Another important point is that Section 80EE has no restriction on how you use the property. You can stay in it, keep it vacant, or even rent it out, and still claim the benefit. This makes it more flexible compared to some other sections of the Income Tax Act.
If you are a joint buyer of the house (for example, husband and wife jointly taking a loan), both can claim the deduction separately, provided both are co-borrowers and co-owners. This can double the benefit, making it highly valuable for families.
Conclusion
Section 80EE is a useful tax-saving option if:
- You are an individual.
- You are a first-time homebuyer.
- Your loan was sanctioned between April 1, 2016, and March 31, 2017.
- Loan is not more than ₹35 lakh and property is not more than ₹50 lakh.
- A loan is taken from a bank or housing finance company.
These condition needs to be fulfilled, then you can save an extra ₹50,000 every year, making homeownership easier and more affordable. For those who bought their houses in the later years, then in that case, Section 80EEA may provide a bigger benefit to them.
FAQs
1. Is the Section 80EE still available in 2025?
Yes, but only for those who took a loan between the time period of 1st April 2016 and 31st March 2017. If your loan was sanctioned then later, then in that case you may check eligibility under the Section 80EEA.
2. Can I claim both Section 24(b) and Section 80EE?
Yes. Section 80EE is in addition to Section 24(b). Together, they give you a total deduction of up to the limit of ₹2,50,000 per year.
3. Can a husband and wife both claim Section 80EE?
Yes, if both are the co-borrowers and co-owners of the particular property. Each can claim up to the limit of ₹50,000. Subject to all conditions.
4. Is there any fixed limit on the number of years I can claim?
No fixed year limit. You can keep claiming every year until the loan is fully repaid.
5. Does Section 80EE apply to second homes?
No, it applies only to first-time homebuyers.
6. Can I claim Section 80EE if I took a loan from a relative?
No. The loan must be from a recognized bank or housing finance company.
