Pre-construction period interest

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Anand (Querist)
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04 April 2023 Hello

My house is ready for delivery. I have taken a home loan for the construction. The apartment complex took 7-8 years to reach completion stage, primarily due to COVID related lockdowns. I have been paying pre-construction interest all these years.

Can I claim this pre-construction period interest in total over the next 5 years? Or am I only eligible to claim Rs. 30K per year for 5 years.

The delay is purely force majeure.

Please help..

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 April 2023 You can claim the preconstruction interest over a period of 5 years.
The total interest claim in a year can't exceed 2 lacs including current year interest.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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05 April 2023 Deduction for interest on borrowed capital shall be limited to Rs. 30,000 in following circumstances:

a) If capital is borrowed before 01-04-1999 for the purpose of purchase or construction of a house property;

b) If capital is borrowed on or after 01-04-1999 for the purpose of re-construction, repairs or renewals of a house property;

c) If capital is borrowed on or after 01-04-1999 but construction of house property is not completed within five years from end of the previous year in which capital was borrowed.

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Anand

Anand (Querist)
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05 April 2023 Thanks Mr. Seetharaman and Mr. Dhirajlal.

Anand

Anand (Querist)
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05 April 2023 Just an add on question. If there is a limitation of 2L per annum, how do I claim the total preconstruction interest of 15L? Can I claim beyond 5 years?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 April 2023 You can't claim beyond 5 years.

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