Tax benefit for pre construction interest on housing loan

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Shivansh Kumar (Querist)
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05 September 2020 Hi,

As per Section 24, interest during the pre-construction period can be claimed as a deduction in five equal instalments starting from the year in which the property is acquired or construction is completed. I have 2 queries in relation to this:

1. A customer had taken the loan from a bank during pre constrcution period, however, the customer has now repaid the full amount of loan to the bank after pre construction period. Can the customer still claim deduction of interest for the 'Pre-construction' period?

2. A customer had taken the loan from a bank during pre constrcution period, however, the loan has now been transferred from bank to individual. Hence, the home loan still exists, but now its been taken from an individual. Can the customer still claim deduction of interest for the 'Pre-construction' period?

Thanks in advance!

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 September 2020 In such a case preconstruction interest can be claimed in both the cases.

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Shivansh Kumar

Shivansh Kumar (Querist)
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05 September 2020 Thanks for the prompt response Sir.

Also, just checking on 1 more thing. In the 2nd case, can the borrower avail deduction of interest for the current period?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 September 2020 Yes interest deduction alone for current period in second case can be claimed.

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Shivansh Kumar

Shivansh Kumar (Querist)
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09 September 2020 Thanks for the clarification, Sir!

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 September 2020 You are welcome.......

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