Pre-construction interest

Yes, once u get possession of your house, u can claim pre emi in 5 years equally. So if your interest till possession is 100000, u can claim 20000 every yr for 5 years

Dear Anand,

Thanks for your reply.

Actually I had this info already. I wanted to know that can I finish off my loan i.e. pay the entire loan before possession and still claim pre construction emi tax benefit. 

Regards,

Bharat

Sir,

Whether it relates to purchase of a flat or your own contruction of house and on what basis your loan was sanctioned without registration. 

Dear Sir,

The loan was sanctioned against a flat that is currently under construction.

Builder hasnt provided the possession letter so far.

Regards,

Bharat

As understood, still you have not taken possession of the flat under construction, you are not eligible to claim the EMI that is  being paid by you till date.(assuming you pay full EMI from the date of sanction of loan).

From the financial year in which you take possession , you are eligible to claim the interest portion alone equally for 5 years. even you finished your loan earlier. and the principle portion which you paid prior to the date of possession cannot be claimed, as exemption is on completion and possession .

The principle you paid earlier during the under construction period will be considered only as healthy financial tool which you opted to square off your loan at the earliest and reduce the interest burden on your loan.

Thanks for the reply.

Most likely I will get possession in next FY only.

But, as per your advice, I will go ahead and pre pay my entire loan before getting the possession.

My only worry was that a person should have a active loan to claim the pre construction EMI.

I hope my understanding is correct!!