Intrest of housing loan

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This query is : Resolved

Brijesh (Querist)

19 August 2011 Suppose we had puchase a house on loan and house is under construction and builder will give the possessiion after two year and my EMI starts.

In that case what will be tratment of Intrest ??

Aditya Maheshwari

Aditya Maheshwari (Expert)

19 August 2011 That interest will be allowable from the year in which construction is complete in 5 equal instalments.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

19 August 2011 Interest can not be claimed until the construction is completed.
It will be accumulated and can be claimed 1/5 th every year in subsequent 5 AYs.

Example-
You took a housing loan on 1.6.2009. Interest for FY 2009-10 60000/ Interest for
FY 2010-11 is , say 90000. Total Interest
is 150000/-.

Now construction gets completed on 1.09.2011.
Interest from 1.4.11 to 31.08.11 is 30000
Interest from 1.09.11 to 31.03.12 is 45000

1.In Current years you will claim
full FY's interest i e 30000+45000=75000
.
2. In respect of accumulated interest of 150000/ you can claim 1/5 th of it i.e. 30000.
.
3. Total Deduction for Interest U/s 24 75000+30000=105000 For AY 2012-13.
.
4. No deduction in the AY 2010-11 and Ay 2011-12.

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