Pre Construction Period

Pre-construction period means the period starting the from the day of commencement of construction or the day of borrowing whichever is later and ending on March 31 immediately prior to the year of completion of construction.

Example: X has taken a loan on 1/4/93 for construction of house property. Construction started on 1/4/95 and completed on 17/8/06. In such case, pre construction period will be a period starting from 1/4/95 and ending on 31/3/06

Treatment: Interest for pre construction period will be accumulated and claimed as deduction over a period of 5 continuous years in equal installments commencing from the year of completion of construction

 thnks ppl...

thanx Mr Deepak Gupta for giving your views on the same

thanks for explaining

If date of completion of the contract in the above case is 31.3.2006, what will the treatment be?

Then 31.3.2006 will be PCP date

Does preconstruction installments need to be reported under CFL?

If yes, how the same need to be adjusted in next 4-5 years?