Housing loan repayment

This query is : Resolved

neerajpandey (Querist)
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19 July 2014 mr. ram has taken loan from bank in feb. 2014 for purchase of flat and falt will get completed in four year thereafter he will get possession. if mr. ram pay housing loan from may 2014, will he get any deduction u/s 80C and 24(b)

Nikhil Kaushik

Nikhil Kaushik (Expert)
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19 July 2014 deduction under 24(b) cannot be allowed till the possession of the house is in your control. you need to accumulate the interest on the housing loan till the year before the year in which the house is completed and possession is received. this accumulated interest can be claimed a deduction in 5 equal installments under section 24(b) from the year in which the possession is received.

with regards to 80C, the same shall apply. except that deduction shall be made available only from the year in which possession is received on the principal paid prospectively.

Chinay Solanki

Chinay Solanki (Expert)
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20 July 2014 As correctly pointed by Nikhil, u cannot claim the deduction neither u/s 24 nor u/s 80C until the property gets completed and u get the possession. But u can accumulate the total interest paid by you before getting the possessiob. Suppose the accumulated interest is Rs 120000. So u can claim a deduction of Rs 24000 for 5 years. This deduction is in addition to the regular interest and principal paid by you. Moreover u can just accumulate interest and not principal.

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