Dear Sir I want to know the Income tax rebate on housing loan interest. what is the maximum time limit for the construction of flat to get IT rebate on housing loan interest. From somewhere I came to know that construction of flat should be completed within three years of taking housing loan But in recent scenario, if builder delays the possession of flat after three years, then whether IT rebate(on housing loan interest) will be applicable for Self Occupied as well as Let out flat ?
Dear Sir,
You are correct. construction should be completed within 3 years from the date of borrowing to avail the interest benefit. In the past, courts had allowed benefit to borrowers basis on the delay in projects by builder so matter is subject to litigation.
Thanks
Hi,
Yes the construction needs to be completed within 3 years from the date of loan taken.
It is subject to litigation. However principally you should get the benefit if it is not your fault
Regards
Hi
Yes, construction should be completed within 3 years in order to avail the benefits.
However, delay by the builder is considered as a genuine cause and the benefits are allowed in most of the cases.
Please note that, there is no deduction allowed for principal repayments of home loan before completion of construction.
Further, deduction for interest paid on home loan before completion of construction is available in 5 equal installments starting from the year of completion of construction.
Dear Sir,
Hope you are doing well !
Yes,the construction must be completed within 3 years from the end of the financial year in which the loan was taken.
Though pre construction interest is allowed to be deducted on the basis of 1/5th each year beginning the year in which the construction is completed – the total amount of pre construction interest and interest on housing loan that can be claimed in a year should not exceed Rs 2 lakhs in any case.
If the construction of the property is not completed within 3 years, the deduction on home loan interest shall be limited to Rs. 30,000.
Thanks & Regards,
Payal Chhajed
Dear Sir,
Ignore my previous reply.
The time limit for construction/purchase of the property is 5 years from the end of the F.Y. in which the loan was borrowed. It was 3 years upto A.Y. 2016-17.
Thanks
However, the limit of 3 years has been increased to 5 years from Financial Year 2016-17 and onwards.
Dear Sir,
This period has been extended to 5 years in Budget 2016, which is applicable from the financial year 2016-17.
Warm Regards,
Karishma Chhajer
Hi,
For let out Property, there is no condition for construction completion.
As per section 24(b), in case of self occupied Property, if acquisition or construction is completed within five years from the end of the financial year in which capital was borrowed, then you can claim interest deduction upto 2 lacs.
However, if the Construction is completed after 5 years then you can claim deduction only upto 30000.
