Property possession delayed by 3 years

I have booked a flat in dec 2009, it was to be delivered in dec 2012-march 2013 but possession completed in may 2015. I have a loan from may 2010 and Pre-EMI (interest portion only) till april 2012 and Full EMI started from May 2012. Full disbursement is yet to be done. My questions are.....

1. Will I get tax benefit on whole 200000 or on only 30000, as it is delayed by 3 years from loan sanction date?

2. Which date is taken for calculation , sanction date, first PRE_EMI date, First Full EMI date or final disbursement date?

3. If it will be only 30000 then what is get around to get benefit on full 200000, like loan transfer or rent the property etc.?
Asked 1 year ago in Income Tax from Noida, Uttar Pradesh
hi
Since the property is not acquired with 3 years of the financial year in which loan was taken, only 30000 will be allowed as deduction , yes if you show it as let out property , you can claim benefit of interest without any ceiling limit.
Shubhi Goel
CA, New Delhi
3 Answers
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  Talk to Shubhi Goel
1. You will get tax benifit upto Rs. 30,000 for loan disbursed (borrowed capital) up to 31.03.2013. For loan amount disbursed after 01.04.2013, you will get benifit of up to Rs. 2,00,000/-.

2.Loan disbursement date should be taken as the wording of the section is 'capital borrowed'.

3.You can get benifit of Rs. 2,00,000/- or actual amount of interest if you rent out the property.
Hardik Vora
CA, Ahmedabad
3 Answers
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1. As per Income Tax Act,1961 you will get income tax benefit only after possession date i.e in financial year 2015-2016. The interest amount paid before construction is completed i.e. construction period will be eligible over a period of 5 years from financial year 2015-2016.

2. The date is date of possession.

3. your point is not clear in this, kindly elaborate with full details and example. 
Shyam Sunder Modani
CA, Hyderabad
955 Answers
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I am not sure what is Rs 2 Lakhs and Rs 30 K. I presume that Rs 30 K is the first disbursement and the Rs 2L is the cumulative disbursement.

1 Your interest liability till the date of completion of your house will be capitalised and the same will be allowed  u/s 24 in 5 equal annual installments commencing from the financial year, in which the house was acquired or constructed. Thus you will be entitled to claim interest payble upto May 2015, when the possession was handed over to you. In the financial year 2015-16, your interest for the period from May 2010 to May 2015 will be allowed in 5 equal annual installments in the financial years 2015-16,2016-17,2017-18,2018-19 and 2019-20.

2 The interest payable to the extent that is not allowed under any other provision of Income Tax Act upto the date of construction / acquisition will be allowed irrespective of the date of sanction/EMI date.

3 The third issue does not arise, as the interest is with reference is the interest payable upto the date of construction / acquisition and not the to the quantum of loan.

It is the amount of interest payable, whether paid actually or not.
B Vijaya Kumar
CA, Hyderabad
290 Answers
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Please elaborate your question.
Please provide full details such as loan amount, interest detail.etc
Deepak Rathore
CA, New Delhi
23 Answers
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For an assessee to be eligible for the deduction of interest under section 24(2) clause b ,  the following things are important -
The capital should be borrowed after 1st April 1999
Such borrowed fund should be for the acquisition and construction of the house property .
Such acquisition or construction should be complete within a period of  3 years from the end of the financial year in which such loan was borrowed .
So in your case the period of 3 year hsould start 01/04/2011 . The house prorperty should be acquired or constructed within period of 3 years  ie up to 31/03/2014 .  So the possession of the flat in this case is not important . If you get construction completion letter or prove that you have acquired the property , which in my opinion you have , you can get the deduction of Rs 150000 ( increased to Rs 200000 from AY 15-16 ) .  There is no case of getting deduction of Rs 30000 in case you do not qualify here .
Prakash Sinha
CA, Delhi
112 Answers
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The interest on housing loan is deductible from the year in which possession of flat was delivered.The interest during construction from dec 2012 to march 2015, will be deductible in 5 equal instalments  from asst year 2015-16. you will get benifit of Rs 2,00,000 interest w e f 2015-16 asst year in case house is self occupied, in case house is let out then entire amount of interest without any limit is deductible against rental income.

The date of possession after completion is the date for claiming deduction interest on housing loans. Other dates have no relevance for income tax purpose.

You are entitled to claim deduction of Rs 2,00,000/- and you have to nothing to claim this except take possession.
Vijay N. Kale
CA, Hyderabad
248 Answers
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