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Claim loan interest + rent in tax returns

Biswajit (IT Professional) (25 Points)

15 July 2016

Hi,
I have taken home loan for a flat in Nov 2014 and paying EMI since Jan 2015. I registered the flat last month (June). I have not occupied it yet. I am currently living in a rented house. In the company prepared Form 16, the rent component is present. Can I also claim the home loan interest paid in this Fy 2015-16 tax returns since I have registered the flat now? If so , can I claim the total interest paid so far starting from Jan 2015 which is about 4 lakhs?

Thanks a lot in advance.

Biswajit

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4 Replies

CA Srujann kumar Reddy (Asst Manager(Internal audit)) (1679 Points)
Replied 15 July 2016

you can claim.... no problem

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CMA Poornima Madhava (CMA) (13112 Points)
Replied 15 July 2016

Assuming that such EMIs are paid during pre-construction period, you can claim the entire interest amount (from Jan15 to Mar16) in 5 equal instalments (subject to max of 2 lacs in case of self-occupied property) starting from the year in which the flat is acquired (in this case FY 16-17) till subsequent 4 years.

Biswajit (IT Professional) (25 Points)
Replied 15 July 2016

Thanks for the responses.

I also spoke with the TaxSpanner folks just now. Similar to what Poornima mentioned, they said that since the flat is registered in June 2016, hence I can take tax exemption on the home loan only in Fy 16-17 tax returns, not this year. 1. Can you guys confirm it again?

Also, 2) the 5 year window for the tax claim starts from the date of allocating home loan ( Nov 2014 in my case) or from the date of registration ( Jun 2016) ?

And 3) In case I do not occupy the flat and give it on rent..while I stay in a rented house..can I continue to claim the rent and the interest in the following years?

Regards,

Biswajit

CA Brijendra Tripathi (Consultant) (142 Points)
Replied 15 July 2016

1) Yes, It is correct

2) 5 Year window will start from the date of registration

3) As I am understanding from your point, either you are speaking about HRA or deduction of Rent under Section 80GG, if you have owned house at the same location of your residence or employment then you are not eligible for 80GG, & if you are receiving HRA then also you are not eligible after owning a house u/s 10(13A).