Section 80EE: Eligibility, Purpose & Benefits Explained

Q: Can I claim both 80EE and 80C?

Yes, you can claim deductions under both Section 80EE and Section 80C, as they are not related to each other. Section 80C provides a deduction of up to Rs. 1.5 lakhs on principal repayment while Section 80EE provides an additional benefit of Rs. 50,000 on the interest paid.

03 JUNE, 2025

Section 80EE of the Internal Revenue Code allows first-time home buyers to avail tax benefits on the interest amount on their mortgages for up to Rs. 50,000.

Who is eligible for Section 80EE?

First-time home buyers can avail the benefits of section 80EE.
Individuals applying for joint ownership can each avail the tax deduction benefits. Taxpayers must undertake a loan from a bank or a financial institution to seek the benefits that fall under 80EE.

The cost of the property being purchased must not exceed Rs. 50 Lakhs.

Maximum loan amount considered for this deduction is Rs. 35 Lakhs.
Homebuyers can benefit from interest deduction under 80EE throughout their loan tenure.

The loan amount should be sanctioned between the financial year 2016-17.
The section provides for deduction in only the interest amounts of the loan.
The home loan must be approved by a financial institution or a housing finance organization.
The benefit does not apply in cases of purchasing commercial property.
The individual must not be a property owner on the day of availing the loan.

However, the following entities are not eligible to seek benefits under this section:

-Hindu Undivided Families (HUF)

-Association of Persons (AOP)

-Trusts

-Companies

Moreover, the buyer does not have to reside in the property to claim the deduction.

Documents Required for Claiming Section 80EE Deduction

The following list of documents is not required to be uploaded while you are filing ITR. However, it is important to keep them ready in case the IT department seeks clarification for any enquiry.

Home Loan Sanction Letter
Loan Interest Certificate
Property Purchase Agreement / Sale Deed
Possession Certificate or Occupancy Certificate (if applicable)
Proof of First-Time Home Ownership
PAN Card and Aadhaar Card
Bank Statement Showing EMI Payments

Other Conditions to Qualify for Section 80EE Deductions

If the interest amount is less than Rs.50,000 for FY 2016-17, the remaining deduction balance can be claimed in the next year, i.e., FY 2017-18.

If you didn’t use the deduction limit under Section 80EE by FY 2018–19, you won’t be able to claim it in coming years.
The property can be either self-occupied or non-self-occupied.
The deductions under Section 80EE of the Income Tax Act exceed the Rs. 2 lakh cap set under Section 24 and the Rs. 1.5 lakh cap set under Section 80C of the Income Tax Act.

What is the purpose of Section 80EE?

Section 80EE provides home loan tax benefits. The deductions, by the former finance minister P. Chidambaram, were initiated to support individuals with low-income to get tax relief while applying for home loans. The section presents a yearly deduction of a maximum of Rs. 50,000 on the home loan interest amount.

How to claim tax deductions under Section 80EE?

To avail benefits covered by Section 80EE deduction, you can fill the allotted field in your IT returns specifying the interest paid in FY 2016-17. You would also need to update documents from your lender stating the interest and principal amount of the loan along with the amount paid to date. Home buyers can follow these steps to understand how they can seek home loan interest tax benefits:

Step I - Calculate how much interest payment is due on your home loan in the current financial year.
Step II - Section 24(b) of the Income Tax act, 1961 allows for the deduction of up to Rs. 2, 00, 000. Claim this deduction.
Step III - After claiming section 24(b), the remaining amount is eligible for tax deduction to a maximum value of Rs. 50, 000.

What is the difference between 80EE and 80EEA deduction?

Section 80EEA was introduced in FY 2019-20, which replaced section 80EE. Both Section 80EE and 80EEA are applicable for first-time home buyers. Here is a description of the elements that distinguish Section 80EE from Section 80EEA.

Section 80EE	Section 80EEA
Pertinent to home loans granted in FY2013-14, FY 2014-15, FY 2016-17.	Pertinent to home loans granted in FY 2020-21, FY2021-22.
Maximum Deduction up to Rs. 50, 000 on the interest amount.	Maximum deduction up to Rs. 1, 50, 000 on the interest amount.
The purchased property’s value must be less than Rs. 50 Lakhs. Also, the loan amount must be less than Rs. 35 Lakhs.	The purchased property’s carpet area must be less than or equal to 60 square meters for metro cities and 90 square meters for other towns and cities. In addition, the stamp duty paid must not exceed Rs. 45 Lakhs.

How is Section 80C & Section 24 different from Section 80EE?

Section 80C of the income tax act permits individuals to avail deductions up to Rs. 1.5 Lakhs per annum. Taxpayers can explore different investment options to seek benefits under 80C. Some of the investment options that can benefit from Section 80C are given below:

Public provident fund, Sukanya Samriddhi Yojana (SSY) account.
Mutual funds (Equity Linked Saving Scheme)
5-year tax saving FDR
National Saving Certificate
Senior Citizen saving scheme
Unit Linked Insurance Plan (ULIP)
National Pension Scheme (NPS)

Section 24 of the income tax act is named “Deductions from income from house property.” it qualifies homeowners for two kinds of tax deductions.

If the homeowner resides in the property, a standard deduction worth 30% of the net annual value does not get accounted for under the tax limit.
Homeowners can claim deductions on the interest on home loan deduction, such as:
- Exemptions on the interest amount of Rs. 2 Lakhs if the owner resides in the property.
- If the loan is taken for the purchase or construction of the property, excluding renovation purposes, homeowners can seek deductions on the interest amount incurred during purchase or construction. This occurs in 5 equal instalments, from the year the property is purchased or the construction completed.
- Loans taken for renovation or reconstruction purposes are not applicable for deductions until the renovation is completed.

Let us compare and analyse the different sections under the income tax act, how they can be used and how they differ.

Income Tax Section	Amount considered for Tax benefits	Deduction amount if the owner resides in the property	Deduction amount if the owner does not reside in the property
Section 80EE	Interest amount	50,000	50,000
Section 80C	Principal amount	1,50,000	1,50,000
Section 24(b)	Interest amount	2,00,000	No limit

Taxpayers can claim numerous benefits in deductions while making investments and purchasing properties. First-time home buyers must have an intricate understanding of the benefits provided by the income tax act to seek deductions. It is recommended that homebuyers have a thorough understanding of the benefits before filing their income tax returns to reap maximum benefits.

Myths About Section 80EE You Must Know About

Different sections of the Income Tax Act are confusing to understand. Let’s break down some of the common myths about Section 80EE:

Myth: Section 80EE can be claimed along with Section 80EEA.

Fact: Taxpayers cannot claim deductions under both Section 80EE and Section 80EEA at the same time. If you have already claimed benefits under Section 80EEA, you can’t apply for Section 80EE and vice versa.

Myth: Section 80EE allows deduction on principal repayment.

Fact: Only interest payments on home loans are eligible for deductions under Section 80EE. Under Section 80C, taxpayers deduct principal repayments up to a maximum of Rs. 1.5 lakh.

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FAQs

Can I Deduct Under Sections 24 and 80EE at the Same Time?

Yes, there is no restriction for filing deductions under Section 24 and 80EE at the same time. If you meet the criteria for both sections, you can enjoy the benefits of both.

To keep it simple, if you availed Rs. 2 lakhs under Section 24(b) for the interest paid on your home loan, you can go for Section 80EE to get additional benefits up to Rs. 50,000.

Can I claim both 80EE and 80C?

Yes, you can claim deductions under both Section 80EE and Section 80C, as they are not related to each other. Section 80C provides a deduction of up to Rs. 1.5 lakhs on principal repayment while Section 80EE provides an additional benefit of Rs. 50,000 on the interest paid.

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A Brief Guide About The Section 80ee: Eligibility, Purpose, And Differences