Short term capital gain with home loan interest

1.    I have constructed a SECOND house with a home loan for Rs 45 lakhs. The construction has been completed in March 2016. I have put it on rent from 01 April 2016 till date. The pre construction interest was Rs 2 lakhs. Till date I have not claimed any tax rebate on the pre constructed interset. The interest on the EMI starting from April 2016 till March 2017 will be Rs 4 lakhs.

ANS. The interest for preconstuction is given in 5 equeal installments, so you can claim Rs.40,000 each year.

2.    I am planning to sell the house. My querries are: (a)    Can I claim any adjustment on the cost of accquisation on the pre constructed interest and the interest on EMI, i.e. Rs 2 lakhs + Rs 4 lakhs and calculate the STCG accordingly?

ANS. In case of short term capital gain you can simply deduct the cost of the house from the selling price.

(b)    Suppose the sale do not take place, how can I claim rebate on the pre constaruction interest of Rs 2 lakhs and Rs 4 lakhs interest on the home loan EMI? As per the Budget, u/s 24 the amount of interest on the EMI has been reduced to Rs 2 lakhs, right?

ANS. for letting out of house property there is no cap for interest deduction so you can claim Rs.40,000 for int on preconstruction period and Rs.2 lakh for int on EMI.