Doubts on income tax deductions.

501 views 2 replies

A Roy

Staff

128 Points Joined July 2012

I have taken home loan (July,2012) jointly with my wife to purchase a flat which was registered in our names in March,2013 (still in under-construction phase). However we actually shifted to flat in June 2013. I am claiming HRA deduction for entire prev. year 2012-13. Can we claim full deductions on home loan interest and principal repaid for previous year 2012-13? or can we claim only one-fifth of interest repaid as deduction? The second option is cumbersome. I have paid house rent till May2013. What should I do?

Replies (2)

sanjay singhal

987 Points Joined June 2007

Interest on house loan for pre construction period is allowed in five years from the year in which construction is completed. In your case it seems that construction was completed during f y 13-14. You can claim interest paid during 12-13 in next five years equally. You may hra benefit upto may 13

A Roy

Staff

128 Points Joined July 2012

Thanks. But to clear my doubt, I'd ask: if the flat were ready in March2013 (actually it was ready, only some furniture-related works were done by us, not by the promoters), would I be able to claim full deduction on interest for the prev. year 2012-13 or not? I guess only principal and interest repaid are deductible, not the bank charges for procuring home loan. Is this correct?