I have taken home loan in 2019 for construction of my own house for self occupied. I have paid principal amount 28349 and interest 81791,total-110140. Now in FY 2019-20 of Income tax can i claim both under 80C and sec24.or i have to claim after completion of my construction. Please suggest.
29 July 2020
You have to claim after completion of construction. Accumulate interest till completion and claim it over a period of 5 years after completion.
29 July 2020
Yes, till completion of construction.
Period between when the money was borrowed up to construction of the house is called as “Pre-construction” period. Until possession of the house, the borrower will have to just pay interest on the loan amount borrowed to the lender, this is called as “PPI- Prior Period interest”
The income tax law provides for the claim of such interest also, called the pre-construction interest, as a deduction in five equal instalments starting from the year in which the property is acquired or construction is completed.
If borrower repay the principal during pre-construction period to lender, then this is not eligible for tax deductions.
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