Section 80EEA
Section 80EEA of the Income Tax Act allowed first-time home buyers an additional deduction up to ₹1.5 lakh per year on home loan interest, over and above the Section 24(b) ₹2 lakh deduction. Eligible only for loans sanctioned between 1 April 2019 and 31 March 2022 on affordable-housing properties.
Understanding Section 80EEA
Section 80EEA was the affordable-housing successor to Section 80EE, introduced in Budget 2019 and extended through Budget 2021. It targeted housing supply growth in the ₹45-lakh-and-below segment by sweetening the home loan interest deduction for first-time buyers.
The deduction is large — ₹1.5 lakh on top of Section 24(b) — and continues for the entire loan tenure for those who qualified during the window. With current home loan rates at 8.5–9.5%, the average borrower pays well over ₹3.5 lakh of interest in early loan years, fully utilising both deductions.
Why it matters
Borrowers who qualified during the FY 2019-22 window have a powerful long-running deduction that most miss claiming. With home loan tenures often 15–20 years, the cumulative tax saving over the loan's life can exceed ₹6–10 lakh. Verify your loan sanction date and property valuation against the Section 80EEA conditions to ensure full claim.
Example
A buyer took a ₹35 lakh home loan in November 2021 for a ₹42 lakh apartment in Pune (under the ₹45L cap). Their FY 2026-27 interest is ₹2.4 lakh. They claim ₹2 lakh under Section 24(b) + ₹40,000 under 80EEA = ₹2.4 lakh total deduction. At 30% slab, savings = ₹74,880 in that year.
A buyer took a ₹35 lakh home loan in November 2021 for a ₹42 lakh apartment in Pune (under the ₹45L cap). Their FY 2026-27 interest is ₹2.4 lakh. They claim ₹2 lakh under Section 24(b) + ₹40,000 under 80EEA = ₹2.4 lakh total deduction. At 30% slab, savings = ₹74,880 in that year.