I have purchased a flat which is about to be completed by Dec 2014.
As per the law I can get tax benefits on principle up to 1L rs and interest 2.5L for first 2 years then 1.5L (if first loan, and loan amount <=25L).
I am starting my EMIs from Apr 2014. So I only need to pay interest for current financial year.
Somebody just informed me that I can't avail tax benefits because the property is under construction. Once the construction is completed and I get possession, I can get tax benefit on amount paid after possession.
However I can get tax benefit on the interest I paid during under construction period in next 5 years. Every year I can get the benefit on 1/5 part of interest paid.
Is there any provision, I can get tax benefit on the interest I am paying in this financial year?