Deduction on house building loan
This query is : Resolved
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.
Please clarify the matter.
Thanks,
Abhishek Roy Choudhury.
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.
Please clarify the matter.
Thanks,
Abhishek Roy Choudhury.
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
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
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.
Thanks,
Abhishek.
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.
Thanks,
Abhishek.
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
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
Message likes :
1 times
12 September 2016
In private banks the procedure may change
You can consult it with the branch head about it
You can consult it with the branch head about it
Message likes :
1 times
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.
Thanks,
Abhishek.
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.
Thanks,
Abhishek.
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
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
12 September 2016
In nutshell if you get occupancy certificate in the FY 2015-16 You can claim interest and principal.
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