IT rebate on home loan if posession delayed beyond 3 years

1131 views 4 replies

Mahesh

26 Points Posted on 21 February 2011

Hi,

I booked a flat in Dec 2007 and home loan for the same from bank HDFC. The loan tenure is 20 years. The loan disbursement/date of cheque from hdfc to builder was made on 23 jan 2008. The builder had commited to give possession by march 2010 in the allotment letter. But possession has not been given till date.

As per my knowledge home loan rebate (1,50,000 on interest and 1,00,000 on principal) can be claimed only on if and only if posession is taken within 3 financial years of loan disbursement. Please correct me if I am wrong.

If what i wrote above is correct then if i don't get the possession before march 2011 (end of financial year 2010-2011) then I can never claim any rebate any time in the future. Is this correct?

Thanks for reading

Mahesh

Replies (4)

Rachit

Ca-Final Article.

565 Points Posted on 21 February 2011

Mr. Mahesh

Law Says Cons. Shall be completed with in 3 Years..................

But there is nothing mention about Possession of property...........

so i think you can claim ded.even if you got possession of property on o after 31.03.2011

Rachit

Ca-Final Article.

565 Points Posted on 21 February 2011

You can see the same on the following link..................

https://www.incometaxindia.gov.in/acts/income%20tax%20act/24.asp

Mahesh

26 Points Posted on 21 February 2011

[quote]Provided further that where the property referred to in the first proviso is acquired or constructed with capital borrowed on or after the 1st day of April, 1999 and such acquisition or construction is completed within three years from the end of the financial year in which capital was borrowed, the amount of deduction under this clause shall not exceed one lakh fifty thousand rupees. [/quote]

"acquisition or construction" does it mean either purchase or construction completion must happen within three years of loan disbursement to be elegible to avail rebate?

Mahesh

26 Points Posted on 21 February 2011

Originally posted by : Mahesh

Income chargeable under the head "Income from house property" shall be computed after making the following deductions, namely:-

(a) a sum equal to thirty per cent. of the annual value;

(b) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital:

Provided that in respect of property referred to in sub-section (2) of section 23; the amount of deduction shall not exceed thirty thousand rupees:

Provided further that where the property referred to in the first proviso is acquired or constructed with capital borrowed on or after the 1st day of April, 1999 and such acquisition or construction is completed within three years from the end of the financial year in which capital was borrowed, the amount of deduction under this clause shall not exceed one lakh fifty thousand rupees

Explanation.- Where the property has been acquired or constructed with borrowed capital, the interest, if any, payable on such capital borrowed for the period prior to the previous year in which the property has been acquired or constructed, as reduced by any part thereof allowed as deduction under any other provision of this Act, shall be deducted under this clause in equal instalments for the said previous year and for each of the four immediately succeeding previous years.

"such acquisition or construction is completed within three years from the end of the financial year in which capital was borrowed" does it mean either purchase or construction completion must happen within three financial years of borrowing year to be elegible to avail rebate?