Union Budget 2016

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House property

 Section 24

The period that is allowed for the completion or acquisition of House property to claim the full ₹ 2 lakh benefit of interest has been increased to five (from three) years.

Thus as per the amended rules, property, if acquired or constructed with capital borrowed on or after the 1st day of April, 1999 and such acquisition or construction is completed within five years from the end of the financial year in which capital was borrowed, the amount of deduction under this clause shall not exceed two lakh rupees.

 Consolidation of Section 25A, 25AA and 25B

Sections 25A, 25AA, and 25B have been consolidated into one section 25A. These sections will be categorized as follows:

 25A (1): “The amount of arrears of rent received from a tenant or unrealized rent realized from tenant, as the case may be, by an assessee shall be deemed to be “Income from house property”, and shall be included in the total income of the assessee whether the assessee is owner of property or not in that financial year.”

25(2): A sum of a 30% deduction will be allowed from such deemed income.

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 Section 80EE (interest on home loans)

Individuals can claim an additional interest of ₹ 50,000 if the following conditions are fulfilled:

  • First time home buyer in FY 2016-17 i.e. assessee doesn’t own any house property on the loan sanction date.
  • Loan was sanctioned in between 1st April, 2016 to 31st March, 2017.
  • Loan sanction amount doesn’t exceed ₹ 35,00,000.
  • Value of house property doesn’t exceed ₹ 50,00,000.