New Provision
Section 131, IT Act 2025
Replaces (IT Act 1961)
80EEA
Chapter
Chapter VIII — Deductions in Computing Total Income
Effective From
1 April 2026
Statutory Text — Section 131
n assessee, being an individual not eligible to claim deduction under section 130, shall be allowed a deduction of interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property, subject to a maximum limit of ₹150000 in a tax year and on fulfilment of conditions specified in sub-section (2), for the tax year beginning on the 1st April, 2019 and subsequent tax years. (2) The conditions referred in sub-section (1) shall be the following:— (a) the loan has been sanctioned by the financial institution during the period beginning on the 1st April, 2019 and ending on the 31st March, 2022; (b) the stamp duty value of residential house property does not exceed forty-five lakh rupees; and (c) the assessee does not own any residential house property on the date of sanction of loan. (3) Where a deduction under this section is allowed for any interest referred to in sub-section (1), deduction shall not be allowed in respect of such interest under any other provision of this Act for the same or any other tax year. (4) For the purposes of this section, the expression “financial institution” shall have the meaning assigned to it in section 130(5)(a).
Shahi & Co. — Our Understanding
This section falls under Chapter VIII which provides deductions from gross total income — these reduce your taxable income and directly lower your tax liability.
Practical Note: Unlike exemptions (Chapter III), deductions require active claiming in the ITR. Ensure proper documentation — payment proofs, investment certificates, employer certificates — is maintained for every deduction claimed.
Shahi & Co., Chartered Accountants
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Disclaimer: This is a reproduction of Section 131 of the Income Tax Act, 2025 (No. 30 of 2025) as published in the Official Gazette of India (CG-DL-E-22082025-265620) for informational and reference purposes only. Shahi & Co., Chartered Accountants makes no warranty as to completeness or accuracy. For the official authenticated text refer to
egazette.gov.in or
incometaxindia.gov.in. This does not constitute legal or tax advice.