Treatment of home loan

I took a home loan in F.Y. 2014-15. My EMI started October onwards. However, I will get the possession in August 2015. Could you let me know how can I claim the interest paid in EMi in F.Y. 2014-15.
Asked 1 year ago in Income Tax from Greater Noida, Uttar Pradesh
Interest paid for pre-construction period is deductible in five equal installments. First installment is deductible in the year in which construction of property is completed or in which year the property is acquired.
Anil Bedi
CA, New Delhi
10 Answers
4.8 on 5.0
  Talk to Anil Bedi
Hello,
Interest included ion housing loan is not allowed as deduction till the possession of the said house for which loan is taken.
All interest paid upto date of possession is allowed as a deduction in the assessment year ,relevant to the financial year in whch possession is taken  in subsequent years in five equal instalments.
Gorhe Associates.
M 9969443910
Vinayak Gorhe
CA, Thane
3 Answers
4.0 on 5.0
  Talk to Vinayak Gorhe
As of now, no deduction can be made for the amount paid towards pre-EMI.Accumalate the same until possession. Then claim the total amount in 5 equal installment.
Shashank Surana
CA, Chennai
60 Answers
4.3 on 5.0
  Talk to Shashank Surana
Interest paid, as part of pre-EMI or full EMI, is not tax deductible during the construction phase. Once you get the possession certificate, the interest component of the pre-EMI (or full EMI) is aggregated and deduction is allowed in five equal instalments beginning from the year in which the construction is completed.

However, principal amount paid as part of full EMI during the construction phase is not tax deductible.
Shyam Sunder Modani
CA, Hyderabad
955 Answers
4.9 on 5.0
  Talk to Shyam Sunder Modani
Interest payable on borrowed capital prior to the acquisition of property will be allowed during the year in which the property is acquired and in equal installments in the subsequent four years u/s 24 of Income Tax Act.

Hence, in your case, you can claim the interest paid on your pre-construction EMIs during FY 2014-15 in FY 2015-16, after you take the possession in August 2015 and the balance amount in equal installments during next four years, i.e., FY 2016-17,2017-18,2018-19 and 2019-20
B Vijaya Kumar
CA, Hyderabad
290 Answers
5.0 on 5.0
  Talk to B Vijaya Kumar
The interest in pre-construction period can be claimed as deduction in 5 equal installments from the year in which property has been occupied i.e FY 2015-16

Regards
Ankit Jain
ankit@ajsh.in
Ankit Jain
CA, New Delhi
32 Answers
4.4 on 5.0
  Talk to Ankit Jain
as you have not got the possession you will not get benefit of interest as in this year. but you will get deduction in future in 5 equal installments.
Kavit Dilip Gadhia
CA, Mumbai
35 Answers
4.2 on 5.0
  Talk to Kavit Dilip Gadhia
In this case the property has not been occupied by you . Further the non occupation is not related to any reason of employment , business or profession. The reason of non occupation seems to transpired here is non delivery of the flat by the builder and you expect it to be in August 2015 . In view of this ,the interest paid before the occupation of flat will not be allowed as deduction under section 24(b) .  However there is proviso clause which says that for the interest paid prior to the occupation can be claimed in 5  equal installment from the FY in which you get the occupation . Thus all the interest paid prior to the occupation of house can be claimed in 5 equal installments starting from FY 15-16 , after getting the possession .  
Prakash Sinha
CA, Delhi
112 Answers
4.9 on 5.0
  Talk to Prakash Sinha

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