IF A BOOK A RESIDENTIAL PROPERTY & AVAIL A LOAN HE HAS MADE A AGREEMNET BUT THE PROPERTY IS UNDER CONSTRUCTON HE WILL GET THE POSSESSION AFTER 2 YEAR.
THE BANK HAS DISBURSED THE LOAN AND THE INSTALLMENT OF BANK GOES EVERY MONTH
MY QUESTION IS THAT WHETHER THE ASSESSEE WILL GET THE TAX DEDUCTION FOR INTEREST & PRINCIPAL REPAYMENT TILL HE GETS THE POSSESSION OR AFTER POSSESSION HE CAN CLAIM
13 January 2011
Interest for pre-construction period i.e. period starting from the day of commencement of construction or the day of borrowing whichever is later and ending on March 31 immediately prior to the year of completion of construction. will be accumulated and claimed as deduction over a period of 5 continuous years in equal installments commencing from the year of completion of construction.
13 January 2011
Yes, Interest can be claimed in the AY relevant to possession. 1/5 th of accumulated interest as point out by Mr Manmohan + amount of interest of the year (from 1st April to 31 st March) will be deductible.
Whereas loan amount ((principal) repayment can be claimed in the year of repayment even if it is prior to completion.
13 January 2011
agreed with the experts on the preconstruction interest, but i am not sure if the Pre EMI will contain principal part as per me EMI includes principal only after the possession is obtained, till then it will be interest only on the amount disbursed,
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