Housing Interest

This query is : Resolved

shamkant (Querist)
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28 January 2011 I purchased on house before last 6 month which is under construction & i took the loan from bank for the same. My EMI was started. Bank charges interest amount. Shall i get the benefit of full interest amount as per the certificate given by bank fro this year i.e. April 2010 To March 2011. Pls guide. I am not getting the possession of house.

Gaurav Barmera

Gaurav Barmera (Expert)
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28 January 2011 You can not claim any income tax benefit on this pre-EMI interest in the year you pay it to the bank.

Pre-EMI interest can be claimed in 5 equal instalments after the construction of the house ends. That is, it can be claimed in 5 equal instalments starting from the FY in which the construction of the house ends and you get its possession.

This pre-EMI interest should be claimed along with the interest component of the EMI under section 24. The overall limit remains Rs. 1.5 Lakhs even in this case.

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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28 January 2011 No IT benefit till the possession of the house.

Total interest paid before possession is called "Pre EMI interest".

You can claim 1/5 of such pre emi interest every year for 5 year starting from the year in which you receive the possession.

No benefit for principal repayment before possession.

Guest

Guest (Expert)

28 January 2011 Agree with Mr. Jha

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