Interest on housing loan reimbursed by builder

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SHAILESH SHETTY (Querist)
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09 May 2017 INTEREST ON HOUSING LOAN FOR UNDER CONSTRUCTION PROPERTY IS REIMBURSED BY BUILDER TO THE BUYER OF PROPERTY TILL THE DATE OF POSSESSION, WHAT IS THE TAX IMPLICATION IN THE BOOKS OF BUYER FOR THE AMOUNT RECEIVED FROM BUILDER TOWARDS THE REIMBURSEMENT OF INTEREST ON HOUSING LOAN. (INFORMATION : THE BUILDER IS NOT DEDUCTING TDS ON THE REIMBURSEMENT.)

FOR EXAMPLE : INSTALLMENT ON LOAN OF RS 50,293/- IS REIMBURSED BY BUILDER ON 04/02/2017 & EMI OF RS 50,293/- IS PAID BY BUYER ON 06/02/2017.

WHAT IS THE TAX IMPLICATION IN THE BOOKS OF BUYER FOR THE AMOUNT RECEIVED FROM BUILDER TOWARDS THE REIMBURSEMENT OF INTEREST ON HOUSING LOAN.

Amol S Joglekar

Amol S Joglekar (Expert)
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09 May 2017 EMI ????????
Which financial institution is charging EMI for property under construction? Can you please specify the name?

SHAILESH SHETTY

SHAILESH SHETTY (Querist)
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09 May 2017 EMI here refers to only Interest Portion. Loan is Taken from INDIABULLS HOUSING FINANCE.

Amol S Joglekar

Amol S Joglekar (Expert)
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09 May 2017 01. It should be treated as the discount received from the builder, in normal cases.
02. The more crucial point is the wording framed in the agreement to sale by the builder. This will decide whether such reimbursement is to be regarded as discount and/or gift.

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