Chapter VIII - Deductions to be Made in Computing Total Income
Section 131
Section 131: additional interest deduction for an affordable-housing loan sanctioned in 2019-22
Section 131 is the Income-tax Act, 2025's version of the deduction long known as "80EEA" - a larger additional deduction (up to ₹1,50,000) for home loan interest on affordable housing, available only where the loan was sanctioned in a specific window (1 April 2019 to 31 March 2022) and the taxpayer isn't already claiming Section 130 for the same property.
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Need advice on Section 131?
This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) An 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).
Introduction
Section 131 offers a capped housing-loan interest deduction to an individual who is not eligible under Section 130. Its tests include a historic loan-sanction window, property stamp value and absence of another house on sanction date.
Key takeaways
Affordable-home loan window
An individual not eligible under Section 130 may claim up to ₹1,50,000 of qualifying interest if the home loan was sanctioned from 1 April 2019 through 31 March 2022.
Property conditions
The home’s stamp-duty value must not exceed ₹45 lakh, and the claimant must not have owned another residential home when the loan was sanctioned; the same interest cannot be claimed twice.
Who this applies to
An individual who is not eligible to claim the Section 130 deduction can claim up to ₹1,50,000 a year under Section 131, if:
- The loan was sanctioned by a financial institution between 1 April 2019 and 31 March 2022.
- The stamp duty value of the residential house property did not exceed ₹45 lakh.
- The assessee did not own any residential house property on the date the loan was sanctioned.
How it interacts with other provisions
As with Section 130, interest deducted under Section 131 for a given amount cannot also be deducted under any other provision of the Act for the same or any other year.
Because the loan-sanction window (2019-22) has closed, this section mainly benefits taxpayers still servicing a loan sanctioned in that period; it isn't available for loans taken today.
Historic eligibility is decisive
The loan must have been sanctioned from 1 April 2019 through 31 March 2022, and the property stamp duty value must not exceed ₹45 lakh. Later interest payments alone do not cure a loan that missed those initial conditions.
Step-by-step flow for applying Section 131
- 1
Is the individual eligible to claim Section 130?
- Yes: Section 131 is not available.
- No: Go to the next step.
- 2
Was the loan sanctioned by a financial institution between 1 April 2019 and 31 March 2022?
- No: No deduction under Section 131.
- Yes: Go to the next step.
- 3
Is the stamp duty value of the house not more than ₹45 lakh, and was no residential house owned on the sanction date?
- No: No deduction under Section 131.
- Yes: Go to the next step.
- 4
Deduct interest up to ₹1,50,000
Interest allowed here cannot be deducted under any other provision for the same or any other tax year.
Practical checklist
Do
- Confirm Section 130 is unavailable, then keep the sanction letter and stamp valuation.
- Test first-home ownership on the sanction date and cap qualifying annual interest at ₹1.5 lakh.
Avoid
- Do not claim the same interest under another provision in any tax year once allowed here.
- Do not treat a loan sanctioned after 31 March 2022 as qualifying.
Illustrative example
Worked example: a home loan sanctioned in 2020
Hypothetical facts (illustration only, not a real taxpayer): Ms. Pillai, not eligible under Section 130, had a home loan sanctioned by a housing finance company in August 2020 for a flat with a stamp duty value of ₹42 lakh. She owned no residential house on the sanction date. Interest payable for the current tax year is ₹2,10,000.
Conditions
Sanction within 1 April 2019 to 31 March 2022, stamp duty value ₹42 lakh (not over ₹45 lakh), no house owned: all met.
Section 131 amount
Lower of ₹2,10,000 and ₹1,50,000 = ₹1,50,000.
No double claim
Only the remaining ₹60,000 can be tested under any other provision.
Outcome
- Deduction under Section 131: ₹1,50,000.
- If the stamp duty value were ₹48 lakh, Section 131(2)(b) would fail and nothing would be allowed under this section.
Glossary
- Stamp duty value
- The property's value for stamp duty, which must satisfy the ₹45 lakh ceiling.
- Sanction date
- The lender's approval date used for the statutory window and first-home ownership test.
Frequently asked questions
Can I claim both Section 130 and Section 131 for the same loan?
No - Section 131 is only available to an individual who is not eligible to claim the Section 130 deduction, since the two target different loan-sanction windows.
Is this the same as "80EEA"?
Yes - the same affordable-housing interest deduction, renumbered as Section 131 under the Income-tax Act, 2025, with the same 2019-22 loan-sanction window.
Can I claim this for a loan sanctioned in 2023?
No - the loan must have been sanctioned between 1 April 2019 and 31 March 2022 to qualify.
Need help applying this provision to your situation?
Check your Section 131 home loan interest deduction with our tax teamLast updated 9 October 2026