A person takes home loan from a bank for which repayment of principal+interest starts from August2012, and the registration is yet to be completed within March 2013. There are other formalities like mutation, payment of municipality taxes to be done even after that so that these may take place in next financial year (i.e., for previous year 2013-14). So I am not sure how to claim income tax exemption for principal and interest paid for period Aug'12-March'13. I have a couple of queries, can anybody please clarify?
1. If only registration of flat is done within March2013 (and no other formalities like payment of municipality tax with in march'13) can full exemption of principal+interest be claimed or as per rule only one-fifth of the amount can be claimed for this previous year? (The rule is preconstruction EMI exemption is to be claimed over five equal instalments in next five years and not the entire amount in one year, if I am correct). Here my doubt is: Is registration of flat enough for the purpose? This is a small city and municipality does not issue occupation certificate etc.
2. Right now the person is supposed to inform these exemptions to his office for TDS purpose. Can he ignore all these for the time being and pay the income tax without bothering about exemptions and later whilie filing return, claim tax refund for the excess? I feel it is better to do so to be on the safe side. What is your opinion?
3. Since the person is govt employee, his salary for the period march2012-February2013 is considered for TDS purpose. This is because salary for march 2012 gets due on 1st April, 2012 so there is no conflict. But while filing return, should he consider EMI payment in march 2013 or not since salary for this month is not considered by employer. Can HRA exemption for march 2013 be considered? Please clarify. Thanks.
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