12 September 2016
Dear Sir, An assesse has taken HBL on Aug'2015 for his new flat, and he is paying Interest and EMI from Aug'2015 onwards. The EMI Amount per month is Rs. 33000.00 and Interest Amt per months Rs. 28000.00 (Approx). He has got Possession of the flat on Jan'2016. My query is whether he will get the benefit of EMI Amount from Aug'2015 and Interest payment from Aug'2015 in his IT Return for F.Y. 2015-16.
12 September 2016
Sir, In the case of construction of flat first you have to execute a tripartite agreement with the builder and bank .means you got constructive possession .my suggestion is this as you have got constructive possession You can apply to bank for converting the EMI to interest portion from Aug 2015 to Jan 2016 and claim interest in the span in the span of 5 years Your Query is not clear as you told that you pay interest and EMI Actually this is not so .Either you pay interest or EMI .means banks normally charges you interest up to the date of completion of construction Thank you
12 September 2016
Sir, In the case of construction of flat first you have to execute a tripartite agreement with the builder and bank .means you got constructive possession .my suggestion is this as you have got constructive possession You can apply to bank for converting the EMI to interest portion from Aug 2015 to Jan 2016 and claim interest in the span in the span of 5 years Your Query is not clear as you told that you pay interest and EMI Actually this is not so .Either you pay interest or EMI .means banks normally charges you interest up to the date of completion of construction Thank you
12 September 2016
Dear Sir, The Assesse is paying the EMI from Aug'2015 which was reflected in his Savings Bank Account from where the EMI is going to that bank and that bank is also taking Interest from Aug'2015 which is reflected in their HBL Statement. So please tell what to do now.
12 September 2016
Sir, I will tell you the concept of EMI In EMI the borrower pay the entire amount to Principal amount of loan .borrower never pays for the interest portion Interest gets accrued only.e.g, if the loan amount is 100000/- and the EMI fixed is 10000/(Hypothetically) Then first month the interest accrued for 100000/-(100000*rate of interest) Next month the interest accrued for 90000/-(90000*rate of interest) I hope the concept of EMI is clear that you never pay for interest interest gets accrued only Now in your case income tax allows for repayment for principal and interest only after construction completed So you can ask the bank to appropriate the EMI(if it is EMI you pay) to interest till the completion of construction Or your construction is completed in the same financial year. So you can claim 80 C for EMI and 24(b) for accrued interest This is my opinion I have answered the Question taking the concept of EMI and procedure followed by nationalised bank In your case construction is completed in the first same year .so you would not gave any problem in claiming interest or principal repayment under deductions I hope it us clear
12 September 2016
Dear Sir, One last query please tell as the Assesse is paying the Interest from Aug'2015 and he get the possession on Jan'2016, so can he claim the Interest from Aug'2015 or from Jan'2016.
12 September 2016
You can get interest deduction from Aug 15 .First you should have a completion Certificate from engineer. You can claim interest and principal in the FY 2015-16 You have to obtain the interest certificate from bank Although the procedure followed by nationalised bank us explained .but when they give interest certificate it shows the principal and interest for the EMI you pay But as per correct procedure You can claim EMI ad payment for principal Interest accrued under interest payment e.g,if you pay EMI Rs10000/- you can claim 10000*12 as Deductions u/s 80 C and interest accrued extra(If the loan is from nationalised bank and after consulting income tax authorities Safer side would be part interest portion and principal portion as normally borrower shows I hope it is clear
CAclubindia
