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Housing Loan EMI

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tejas

accountant

48 Points Posted on 23 February 2021

I have purchased a flat under the scheme that builder will pay EMI till possession. Now EMI goes from my account and he refunds me the amount after deducting TDS. please tell me the effect of Income tax on this transaction. how this transaction to be shown in computation of income please give the full details

Replies (4)

Quick Summary

This discussion explores the income tax implications of a housing loan EMI arrangement where the builder pays EMIs until possession, refunding the amount after TDS deduction. The advice suggests that the builder's refund might be taxable as 'income from other sources'. It also clarifies that the interest paid during construction can be claimed in equal instalments post-possession, subject to conditions. The user is seeking detailed guidance on how to report this in their income computation and identify the relevant TDS section.

Fazil Ahmad

70 Points Posted on 23 February 2021

In which section he deduct tds

tejas

accountant

48 Points Posted on 23 February 2021

i don't know the section as TDS certificate in not issued as 1st transaction just done

but rate at which he deducts TDS is 10%

Josh

Manager

104 Points Posted on 23 February 2021

In my opinion, the money which you receive from the builder will be chargeable to tax as income from other sources during the period of receipt. The interest portion that you pay during the construction period can be claimed in 4 equal annual instalments post getting possession subject to conditions.