28 December 2012
Well, you can avail the tax exemption only when the construction is completed. In this case the Pre- Emi is paid while the house is under construction. So, you cannot use the Pre-Emi as the Tax deduction source. Once the construction is completed, the total Pre-Emi interest paid can be availed as exemption in five equal instalments in the subsequent years
For example, if you have paid Rs.100,000 as the pre-EMI, then Rs.20,000 will be shown in the next five years as tax deduction. Note that pre-EMI is only the interest paid during the period. If you have paid any principal amount, that is not eligible for the tax deduction
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