House property

Preconstruction Interest is the Interest paid on housing loan from the date of taking loan to the preceeding previous year in which construction has completed and it will be allowed in 5equal installments from the previous year in which construction has been completed. For eg. If you take a loan of 20Lakhs in 2011 and started your house construction.construction is completed in the year 2014. Interest paid up to 2014 is 90000 (out ot which 10000 relates to previous year 2014). Hence Preconstruction interest is interest paid up to 2013 i.e 80000 and preconstruction allowed in 2014 is 16000(80000/5) and entire interest paid in 2014 i.e 10000 will be allowed in 2014 itself. Hence deduction of Interest u/s.24 in 2014 is 26000.