IT exemption on principal and int before possession

This query is : Resolved

Amit (Querist)
Follow

30 January 2011 I have availed housing loan from Nationalised bank.
1) The payment to contractor is on the basis of slab. (i.e. -
a)15% at the time of agreeement
b)for each slab (1 to 6 slab) 10%
c)10% at the time of brick work -
d)5% at the time of possession.

The payment till date is upto 6th slab (15+10+10+10+10+10+10=85%)

Loan disbursement started from 4th slab (September 2010) till then I contributed.

The EMI started immediately the month in which the disbursement of loan started (Sept 2010).

Possession will be in mid 2011 (June 2011)

whether interest and principal paid during this year 2010-2011 (Sept 2010 to March 2011)is allowed as exumption in income tax in this year 2010-2011

The problem is because possession is not in this year (2010-2011)

Guest

Guest (Expert)

30 January 2011 No, deduction for principal as well as interest will not be allowed.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

30 January 2011 In my opinion Principal Repayment will be eligible for 80C deduction.

However Interest Deduction will be allowed
from the year of completion of construction.

Upgrade to CAclubindia Pro. Subscribe Now!

Guest

Guest (Expert)

30 January 2011 During the construction period, income from house property can not be chargeable to tax and therefore, no deduction will be allowed.