01 August 2010
it is very simple.. it goes like this. the interest til the end of the immediately preceeding financial year in which the house was completed shall be prior period interest. it can be claimed as deduction in 5 equal installments from the year in which the construction is completed
for eg if a loan was taken in the month of june 2007 and the house construction was completed in the month of july 2009 then prior period interest shall be
june 2007 to march 2009.... this the the end of immediately preceeding financial year in which the construction was completed.
if the house gets complete only in the month of sep 2010 then til march 2010 wil be prior period interest
02 August 2010
Interest paid during the preconstruction period will be allowable in 5 equal instalments over fice years from the year in which construction is completed.
So interest deduction allowable only from the year in which constuction is complete.
02 August 2010
Preconstruction Interest will be from 1 april 09 to 31 mar 2012 which will be deductible from year ending 2013 to 2017 in five instalments.
02 August 2010
Current year interest is the interest paid during the year for which no deduction will be allowable in the current year but from the year in which construction will be completed.
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