Save Rs 499. Go Ad-Free with CAclubindia Pro for 2 Full Years. Subscribe Now!

Restrictions in income tax rebate for pre-emi

Tax queries 649 views 1 replies

Ramakrishnan

24 Points Posted on 07 February 2014

As per Income tax rule, Interest component of pre-emi can be claimed over 5 years after possession.

Is there any restriction that this can be done only if the construction is completed within 3 years of commencement? In other words, can I claim this Interest component only if possession is made within 3 years from the commencement date/loan disbursement date or whatever?

Can someone clarify?

Replies (1)

Guest

. Interest upto Rs.1,50,000 is deductible if the following conditions are satisfied:
• capital is borrowed on or after April 1, 1999 for acquiring or constructing a property;
• the acquisition/construction should be completed within 3 years from the end of the financial year in which capital was borrowed

The interest paid/ payable before the final completion of construction or acquisition of the property will be aggregated and allowed for five successive financial years starting with the year in which the acquisition or construction is completed. This deduction is not allowed if the loan is utilized for repairs, renewal or reconstruction.