HDFC Home Loan Interest

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If you've taken out an HDFC home loan for a self-occupied property and received possession in FY 2021-22, you can claim interest paid in earlier financial years as pre-construction interest. This deduction can be claimed over the next five years. The repayment can be considered from FY 2011-12 onwards. For self-occupied properties, there's an upper deduction limit of ₹2 lakh per year, while no such ceiling applies to rented properties.

MAKARAND DAMLE

MAKARAND DAMLE (Querist)

06 July 2022 Self Occupied Property for which possession was given in March 22
For earlier FY from 15-16 to 20-21 interest and principal amounts were repaid on housing loan to HDFC Ltd
The interest was not considered since possession was not given

My question is whether in FY 21-22 year in which possession was given interest for earlier years can be considered as interest on pre construction period ? I can go back how many years and what will be quantum of deduction ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

07 July 2022 Yes, consider it as pre construction period interest and claim it in next 5 years.
You can consider interest from 15-16.

MAKARAND DAMLE

MAKARAND DAMLE (Querist)

07 July 2022 Actually the repayment has started from FY 2011-12.
Whether Interest paid from FY 2011-12 be considered as pre construction period interest and claim it in next 5 years.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

07 July 2022 Yes, you can consider it from 2011-12.

CA Puja Sharma

CA Puja Sharma (Expert)

07 July 2022 Yes, consider the entire interest paid during the period of construction. Take 1/5th of the total interest paid on EMIs as a deduction in the next 5 years.

MAKARAND DAMLE

MAKARAND DAMLE (Querist)

07 July 2022 Is there any upper ceiling for interest ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

07 July 2022 Upper ceiling of 2 lacs for self occupied.
No ceiling for rented house.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

07 July 2022 Let me quote here the explanation given under sec 24(b) of IT act...
Explanation.—Where the property has been acquired or constructed with borrowed capital, the interest, if any, payable on such capital borrowed for the period prior to the previous year in which the property has been acquired or constructed, as reduced by any part thereof allowed as deduction under any other provision of this Act, shall be deducted under this clause in equal installments for the said previous year and for each of the four immediately succeeding previous years:

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