I AM HAVING A HOME LOAN SINCE 2003 FOR A FLAT WHERE I CURRENTLY RESIDE. THE LOAN IS IN MY NAME AND I CLAIM TAX REBATE OF INTEREST FOR THE SAME.
IN 2008 I HAVE STARTED BUILDING A HOUSE AND AGAIN A FRESH HOME LOAN WAS TAKEN IN MY NAME. CURRENTLY I AM PAYING TWO HOME LOAN EMIS BUT MY EMPLOYER IS NOT GIVING ME CLEAR IDEA HOW I CAN CLAIM TAX BENIFIT ON BOTH THE LOANS.
14 March 2009
(1) Out of two residential units, you are entitled to treat one as for your self residence and the other as let-out property (There is scope for tax planning here)
(2) After completion of construction of two residential units-- (a) You are entitled to claim Sec 80C Deduction for BOTH residential units upto a maximum of Rs 100000 (subject to others such as PF, LIC etc)
(b)For self-occpied flat, you can claim interest as expenditure upto Rs 150000. For let-out property, you can claim full amount of interest as expenditure
(3)While the second house is under construction--
(a) There are divergent views about Sec 80C Deduction
(b) You cannot claim Interest as expenditure. (Interest for Pre-construction period can be claimed as expenditure in five equal instalments, first one being from the year in which construction is completed)
Please visit www.apnaloan.com where you find answers to several FAQs on Home Loan subject
IMPORTANT: If your spouse is having or likely to earn taxable income, it is desirable to register property in joint names and obtain Home Loan in joint names
Sorry to say I am not getting the correct reply. The flat where I am currently staying is having a interest component of 95000 in the home loan part. I am considering it under section 24.
But I have taken another home loan from HDFC which is not even completely disbursed, I am paying pre-emi now. The certificate which HDFC had issued me states that pre-emi interest I have paid in this financial year is 65,000 which as per there statement again falls under section 24.
Now the 2nd being a under construction property I can not show the other one as rent out. Pls. suggest now.
16 March 2009
(1) Interest of Rs 95000 being paid towards Home Loan for Flat in which you are currently residing: This can be claimed as expenditure as you have been probably doing all along
(2) Pre-EMI interest of Rs 65000: Since the house is under construction, this cannot be claimed as expenditure at this stage.
After completion of house, total amount of Pre-EMI paid upto beginning of FY (in which house is completed),can be claimed as expenditure in five equal instalments from FY in which construction is completed
16 March 2009
Suppose the property gets completed in Jan 2010 and actual emi starts from Feb 2010. How should I claim the pre-emi interest and actual emi interest then. ( approx 2 months ) .
18 March 2009
Interest upto Mar 09 (but not Jan 10)only is treated as Interest for Pre-construction period. One-fifth of this can be claimed as expenditure in FY 2009-10 (AY 2010-11). Balance can be claimed in next four years
Interest from Apr 09 to Mar 10 can be claimed as expenditure in FY 2009-10 (AY 2010-11)notwithstanding that construction is completed not in Apr 09 but in Jan 10, that is, only two months before FY end
You need to distinguish between "Pre-construction" and "Pre-EMI". "Pre-construction" is relevant but not "Pre-EMI" (Of course, I too used Pre-EMI in my previous reply in the absence of periods information)
If you are in Finance or Accounts, refer Para 39.3.2a of 31st edition of Singhania's Ready Reckoner; else please contact concerned Officers in Finance or Accounts departments of your Company
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