23 February 2009
i took loan for purchase of plot with a condition to start construction within two years. my query is i can claim deduction of principal amount in EMI from the year in which i took loan or can i claim it when i start my construction and also upto wat period if time.
23 February 2009
Yes, for the principle portion of emi you are repaying you can claim the deduction, however interest you have to carry over and after completion of the building you can cliam in 5 equal installments.
(b) In the Artcile available in the following link, "...for claiming deduction u/s 80C for principal amounts out of borrowed home loan, there is no need of completion of construction"
So if your Query relates to a practical situation, you be prepared for disallowance for Principal repayment made in finanical years preceding the one in which construction is completed
(2) Interest: There is no ambiguity with regard to Interest relating to pre-construction period. This aspect is discussed in very detail in Articles available in both the above links
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