Income tax benefit on home loan under affordable housing explained2 min read . Updated: 06 Jul 2021, 12:52 PM IST
- ₹45 lakh upper limit cap on home loan amount under affordable housing doesn't allow a new home loan borrower to claim the maximum ₹3.5 lakh exemption limit at current home loan interest rates regime
Home loan interest rates coming down to the tune of around 7 per cent (SBI home loan interest rate starts at 6.70 per cent per annum) is good news for home buyers as it would lead to lower monthly EMI. However, if a home buyer is buying unit, which is priced below ₹45 lakh, then he or she would be able to claim an additional ₹1.5 lakh income tax exemption on home loan interest payment under Section 80EEA. This income tax benefit will be given in addition to ₹2 lakh home loan interest payment under Section 24(b) of the income tax act 1961. However, the question is, will the new affordable home loan borrower will be able to claim income tax exemption to its maximum limit of ₹3.5 lakh? According to tax and investment experts, the answer is 'no' as ₹45 lakh upper limit cap on home loan amount doesn't allow a new home loan borrower to claim the maximum ₹3.5 lakh exemption limit at current home loan interest rates regime.