Home loan interest deduction eligibility: help needed

Save Share

This query is : Resolved

Nitin (Querist)

25 December 2012 Dear Experts
I seek your help in resolving a query of mine:
I have availed home loan for an underconstruction flat in Jaipur in 2010. I have been paying pre-EMIs since then. In Oct 2012, possession has been granted. Questions:

1. Will possession be deemed after getting registry of flat done? Bank is asking for registry. But, I can only get registry done in March.
2. If registry is done in March 2012, can i get full interest benefit (1.5L) while filing IT return of FY? Interest of FY 12-13 is approx Rs 1.5 Lacs.
3. Total Pre-EMI Interest is Rs 2 Lacs (until March 2012). Can i add Rs 40K (2L/5) in current year interest to get deduction of full interest & Pre-EMI (i.e. 1.5L+40K)?
4. I live in Mumbai. Can i still show this flat as self occupied and not add notional rental income in my IT return?

Looking forward to your kind help. Thanks

@VaibhavJ

@VaibhavJ (Expert)

25 December 2012 Hey GM,

1. As per S.53A, on the basis of performance theory registration of flat is not necessary.

2. Yes if registration is done by 31st March you will get full benefit of 1.5 Lacs.

3. No, Max int allowable u/s is only 1.50 lacs.

4. Yes.

Thanks//Vaibhav

Nitin

Nitin (Querist)

25 December 2012 Thanks Vaibhav!

As you know that Interest + pre EMI interest is more than 1.9 Lacs 2012-13; do you think its better to show this as a rented property on a notional rent? As registry will be done in March 2013 only, it will be deemed as rented only for 1 month. So, can i claim full 1.9 L deduction by only adding one month's rent to the income?

@VaibhavJ

@VaibhavJ (Expert)

25 December 2012 yes..

you can do that, but what abt next financial year?

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now