Doubt about tax benefit from home loan.

Tax queries 402 views 4 replies

A Roy

Staff

128 Points Joined July 2012

I am staying in rented accommodation and I have booked a residential flat which is likely to be completed and given possession in January/February 2013. However, my EMI due to home loan had started in July 2012. Can I claim full benefit of interest paid and principal paid for the entire period (July 2012 - March2013) or will I be entitled to tax benefit only for the months remaining in FY 2012-2013 after getting possession for AY 2013-2014?

Second, can I claim home rent deduction (I receive HRA) simultaneously with home loan benefit? Thanks.

Replies (4)

S Jananikrishna

Learner

219 Points Joined June 2012

01. If the construction of flat is likely to be completed by Jan/Feb 2013, to the date of compeletion u can claim the interest paid towards housing loan as PRE CONSTRUCTION INTEREST which is allowable in 6 installments as per income tax act 1961.

02. U can claim HRA and Loan EMI simultaneously , bcoz the condition exists that u need to pay rent for claiming HRA.

A Roy

Staff

128 Points Joined July 2012

Thanks for clarification. However, you mention that pre-construction interest is allowed for tax benefit. What about the pre-construction "principal" amount paid? Is that also allowed or not? Thanks.