Homebuyers alert! You can't avail this tax benefit on home loan from tomorrow, April 1

Fom 1 April 2022, the additional tax deduction available for affordable housing under section 80EEA will not be available, because FM Sitharaman in her Budget 2022 announcement has not extended this tax break for financial year 2022-23.

New Delhi: Aiming to boost the affordable housing demand, Finance Minister Nirmala Sitharaman had extended in the last year's Budget the date of availing an additional Rs 1.5 lakh tax deduction on home loan interest taken during the period between 1 April 2019 and 31 March 2022.

A new Section 80EEA of the Income-tax Act, 1961 was also inserted to allow for an interest deduction from AY 2020-21 (FY 2019-20). This was an enhancement from the previous provision in Section 80EE that allowed a deduction up to Rs 50,000 for interest paid by first-time home-buyers for loans sanctioned from a financial institution between 1 April 2016 and 31 March 2017.

However, from 1 April 2022, the additional tax deduction available for affordable housing under section 80EEA will not be available, because FM Sitharaman in her Budget 2022 announcement has not extended this tax break for financial year 2022-23.

The additional deduction of Rs 1.5 lakh over and above Rs 2 lakh was introduced in the the 2019 year's budget. This was allowed for those buying homes for the first time and of up to Rs 45 lakh and made applicable for home loans sanctioned till March 2020 which was later extended to March 2022.

The real estate industry, facing a huge demand slowdown and sluggish housing sales, had sought extension of this additional deduction, but wanted the price cap of Rs 45 lakh to be enhanced.