01 April 2011
If a salaried employee has taken housing loan but he could not get the possession of the property in the first year while he paid the first installment of principal & Interest. Then he can take the tax benefit on that amount in the following 5 years as 1/5 each year.But please tell me if that person pays off the loan just in 3 years then what will be the treatment of the left 2/5 portion of housing loan int+ principal.Can he claim it in the third year only.
01 April 2011
1st of all Only interest can be claimed for Pre-possession period. Principal repayment in this period can not be claimed.
Now... the total interest paid during pre-possession period (known as pre-EMI interest) can be claimed 1/5 in 5 consecutive FY starting from the FY in which the possession has been taken.
Even if the total loan has been repaid in 3 years, he can continue to claim the 1/5 of the pre-EMI interest for next two years.
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