Deduction of interest on home loan for a self occupied

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shalabh agarwal (Querist)
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18 July 2019 I took a loan in year 1 for a home which was under construction. The construction completed in year 3. As soon as construction was completed, I shifted to this property ( self-occupied )

The interest paid in year 3 was Rs 3,00,000, in year 4 it was Rs 2,00,000 and in year 5 it was Rs 1,50,000 . I claimed deduction of Rs 2,00,000 in year 3 as well as year 4. There was no scope for claiming deduction of the interest paid during construction period ( i.e Year 1 and Year 2 ) in year 3 and year 4

Now, when the interest paid during the year 5 is less than Rs 2,00,000, I will be claiming deduction of interest paid during the construction period ( i.e. Year 1 and Year 2 ) in year 5

My questions

1) Can I deduct the interest paid during the construction period ( i.e. year 1 and 2 ) starting from year 5 to year 9 in five equal installments or Do I need to claim the interest paid during the construction period ( i.e. year 1 and 2 ) from year 3 to year 7 in five equal installments. { construction was completed in year 3 }

2) In the year 3 ( the year when the construction was completed ) I paid an interest of Rs 3,00,000 while I was able to deduct only Rs 2,00,000. Is it possible to carry forward the loss of Rs 1,00,000 to the next year for a self occupied property.

Shashikant Varshney

Shashikant Varshney (Expert)
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18 July 2019 1) you need to claim the construction period interest in five years from Year 3 to 7.
2) there is a provision of C/F of interest as per income tax Act, 1961.

shalabh agarwal

shalabh agarwal (Querist)
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18 July 2019 Please refer your reply no 2 : IS carry forward of losses possible in cases of self occupied property.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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27 September 2021 No. That is the maximum amount deductible. Any excess paid is written off, but can't be carried forward.

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