What is pre construction period? ?
This query is : Resolved
20 February 2015
a person took housing loan on 15th April 2013 rs 400000 and started construction of house. ... it was completed on November 2013 from December 2013 onwards he started paying EMI`s and also paid pre EMI interest... interest rate 16% p.a at monthly rests
What is pre construction period here if started using the house from December 13 onwards
20 February 2015
Hi Mr. Vijay,
Your preconstruction period is ending in the same year in which house is complete so you will be allowed deduction in the same year in FY 2013-14 itself.
For ready reference you can also go through the following details:
As per Income tax pre construction period means
Interest up to the end of Financial year ,immediate proceeding to the year in which house is completed.
suppose loan is taken on Jan ,2008 and House is completed on 31.01.2010, in that case pre -construction Interest is taken from Jan 2008 to March 2009.
In above example ,even if House is completed on 31.03.2010 then also the pre construction Interest is considered From Jan 2008 to march 2009.
From the above example you can note the point that interest for the year in which construction is complete should be considered as normal interest on Loan & deduction will be allowed in the same FY for whole of the amount.
Regards
Your preconstruction period is ending in the same year in which house is complete so you will be allowed deduction in the same year in FY 2013-14 itself.
For ready reference you can also go through the following details:
As per Income tax pre construction period means
Interest up to the end of Financial year ,immediate proceeding to the year in which house is completed.
suppose loan is taken on Jan ,2008 and House is completed on 31.01.2010, in that case pre -construction Interest is taken from Jan 2008 to March 2009.
In above example ,even if House is completed on 31.03.2010 then also the pre construction Interest is considered From Jan 2008 to march 2009.
From the above example you can note the point that interest for the year in which construction is complete should be considered as normal interest on Loan & deduction will be allowed in the same FY for whole of the amount.
Regards
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