I have a home loan sanctioned on Feb 09. I am constructing a house at my home town which is almost 400 kms away from my office and due to this I am staying at a rented house. I am paying interest on this loan amount from April 09 onwards on the amount disbursed by the bank. I will be availing the entire sanctioned loan amount by Feb 2010.
My firm requires Investment declaration to be completed by the employee during beginning of the financial year (April 09) and the salary is paid out on the basis of this declaration. Due to this I had declared an amount equivalent to 45,000 under the section interest paid towards home loan. I have already paid and interest of 40,000 till Jan 2010 and will be paying another 18,000 till March. The total amount paid will be around 60,000 during April 2009 – Marc 2010. This month (Jan 2010), I need to submit all my real investments and details of interest paid and if not, my salary will be slashed for tax during Feb 10 and March 10.
I have few concerns on the tax rules,
1) Will my firm cut any extra tax as I will be completing construction only during March 2010?
2) If the construction is not completed even after the bank has disbursed the entire loan amount, how the interest calculation will occur?
3) Will I get any benefits on the interest paid during April 09 till March 10, if the construction is completed on Marc 2010?
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