• Home loan interest

I have a Home Loan, against a Property.
- Loan Started in Oct-2011. (Under construction apartment purchased from a Builder).
- Construction completed on 23-Mar-2016, Builder offered Possesion on 23-Mar-016.
- I paid all pending dues, completed Builder specific formalities and got Possesion of the Flat on 31-Mar-2016.

I have also changed my job 2 years back and hence living in a different city now.

Now, for this flat for the Financial Year - 2015-16, how should I claim the tax benefit on Home ;Loan 
interest, for current year and pre-construction years.

Q1. Can I consider this flat as Eligible for Home Loan benefit, given the fact that possesion given/possesion certificate has been issued by builder to me on 31-Mar-2016?

Q2. As currently this is vacant and is in a different city, can I consider this as Deemed Let out property?

Q3. In case of deemed let out, What should be the fair rental value. Prevailing Monthly rental in that area is 6000-8000/- per Month. (please note that I have got possesion on 31-Mar-2016).

Please help in clarifying this? 
Asked 2 years ago in Income Tax from Gurgaon, Haryana
As per our view You are eligible for Housing loan benefit for FY 2015-2016. For the pre construction period you can claim interest for next 5 years 1/5.

For the current FY 2016-2017 you can treat it as deemed let out at FMV in that area.

Shyam Sunder Modani
CA, Hyderabad
1408 Answers
95 Consultations

5.0 on 5.0

No need for showing deemed let out in FY 2015-2016 as u received possession in Mar16
Shyam Sunder Modani
CA, Hyderabad
1408 Answers
95 Consultations

5.0 on 5.0

Dear Sir,

1. Since property has been constructed in more than 3 years, you can claim interest deduction but maximum upto 30000.

2. Yes, you can consider.

3. You can take FMV for 8 days.

Please feel free to call/revert in case of any doubts 

Thanks and Regards
Abhishek Dugar
CA, CS, B.Com
Abhishek Dugar
CA, Mumbai
2788 Answers
114 Consultations

5.0 on 5.0

Yes you are correct. I skipped that point. 

Further, the amount of interest which you can claim would be 1/5 of total interest paid till 23 March 2016

Please feel free to call/revert in case of any doubts 

Thanks and Regards
Abhishek Dugar
CA, CS, B.Com
Abhishek Dugar
CA, Mumbai
2788 Answers
114 Consultations

5.0 on 5.0

Dear Sir,

I would suggest instead of showing it as Deemed to be Let Out preferably show it as Let Out and claim the entire Interest as Deduction u/s 24.


Trust this clarifies your query. 

Feel free to call back/ get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP.
Rohit R Sharma
CA, Mumbai
2089 Answers
90 Consultations

5.0 on 5.0

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