I have booked a flat in Hyderabad with reputed Builders.
I have booked the flat in December 2012.
Loan of about 35 Lakhs was sanctioned in August 2013 and about 30 Lakhs was disbursed to Builder in September 2013. I am paying the EMI to the bank from October 2013 month till date.
However the construction of flat is not completed till date and registration of the flat on my name is also pending since then.
My question is, Can I claim tax benefit on the Principle and Interest amount I am paying to Bank? Any help in suggestion would be highly appreciated.
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1 Answer
Can I claim tax benefit on the Principle and Interest amount I am paying to Bank?
The Principle payment there is no benefit till you take possession of the house. If you take possession of the house before 31 March 2016[even if taken on 30 March], the principal payments from April to March can be claimed. Any principal payments you made from Sept 2013 till 31 March 2015 is lost.
The Interest payments can be claimed in a portion of 20% each year from the year you take possession. For Example if the interest was Rs 1 lacs till 31 March 2015, you can claim Rs 20,000 for next 5 years. The overall limit still stays Rs 1,50,000
Note: There is a clause in tax rebate that states that if the possession of house is not taken within 3 years from taking the loan, the rebate on interest would be reduced to Rs 30000 from 1.5 lacs.