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Regarding House Loan interest deduction

mukeshkb4u (Engg) (25 Points)

10 May 2011

Dear all,

I have Bought a flat this year in Jan 2011, and have taken a Loan from SBI.

I have already started the Full EMI on my loan amount.

My flat is under construction and it will get over by Aug 2012.

Can i claim tax deduction of Interest paid in this Year, as at few places i read that it can not be claimed if the flat is not fully completed in this year and at few places its written that i can claim, if it will be ready within a span of 3years.

Kindly help me in this regard.

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5 Replies

Harpreet (* * * * * *) (1670 Points)
Replied 10 May 2011

You can not claim the deduction/exemption of Interest part of House Loan as construction of your flat is still going on and to be completed by Aug'2012.

(But you can claim this amount equally divided in 5 years respectively). Just wait for other reply on this braket portion or visit on other website for this issue, you will find the answer.

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Rajnikant Vadigoppula (CA, CS And CMA Final) (919 Points)
Replied 17 May 2011

you cannot claim interest as deduction until construction is complete.

Afterward u can claim full interest along with pre construction interest (in 5 equal instalments in 5 financial years) but the condition is construction must be completed within 3 years of commencement and a miximum of 150000.

Even u can claim principal repayment u/s 80 C but only after completion of construction.

mukeshkb4u (Engg) (25 Points)
Replied 17 May 2011

Hi rajnikant..

Thanks for your reply.

Can you please tell me what do you mean by the condition that the construction must be completed within 3years of commencement?

If we can claim the deduction only after the completion of construction, then what is this condition means? both statements are contradictory..

Regards

Mukesh

construction must be completed within 3 years of commencement

Originally posted by : Rajnikant Vadigoppula
	you cannot claim interest as deduction until construction is complete. Afterward u can claim full interest along with pre construction interest (in 5 equal instalments in 5 financial years) but the condition is construction must be completed within 3 years of commencement and a miximum of 150000. Even u can claim principal repayment u/s 80 C but only after completion of construction.

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 18 May 2011

Originally posted by : Harpreet
	You can not claim the deduction/exemption of Interest part of House Loan as construction of your flat is still going on and to be completed by Aug'2012. (But you can claim this amount equally divided in 5 years respectively). Just wait for other reply on this braket portion or visit on other website for this issue, you will find the answer.