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I am living in India.
I want to know if I can claim tax benefit for the interest paid on my home loan under Section 24 for the pre construction period if I foreclose the loan before 3 years of possession.
I have given a detailed example to my problem:

Scenario Explanation:
A person 'P' has borrowed Home loan from a bank 'B' in the year April 2016.
The house was under construction during that time. The EMI paid out was approx 20k per month.
The construction was complete and possession of the property was given in the year April 2019 - after 3 years since the loan started.
Now, as per Section 24 of the Income tax act, the interest paid during the period of pre-construction( 3 years in this case) is allowed to be shown as loss on property. This is supposed to be shown in equal parts for the next 3 years.
Lets say the interest paid in these 3 years is 3Lakhs. So, in the next 3 years, a tax benefit of 1 Lakh per annum can be claimed.

Now, the problem is that if the loan is foreclosed in the year August 2019. Am I still allowed to claim the tax benefit for the next 3 years?

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2 Answers 2

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In normal course of action if is carried over equally in next 5 years. There is no clarity on whether the loan needs to be active. Consult a CA

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The interest of the pre-construction period is allowed in equal parts in 5 years. Foreclosure of the loan later doesn't affect this.

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