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Interest on home loan for property under construction

26 July 2019

I have purchased a residential flat which is unofficially in ready to move condition in a complex comprising of total 6 Blocks, out of which 5 blocks are in ready to move condition and 1 block is under construction. Developer said that the (CC) Completion Certificate yet to be received (around January 2020) as the total project is under construction. Can I claim deduction on interest portion of emi paid on housing loan for this year (FY 2019-20 AY 2020-21).

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178226 Points)
Replied 26 July 2019

With possession letter issued by builder and the final completion certificate issued by authority by Jan 2020 (before end of the FY), you will be eligible to claim interest benefit u/s. 24(b) in AY 2020-21.

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Partha Mukherjee (Service) (43 Points)
Replied 26 July 2019

Thank you sir

can i get benefit on the emi paid before january 2020, i.e. before CC date

Nithin Joseph (CA in Practice) (161 Points)
Replied 26 July 2019

Period between when the money was borrowed up to construction of the house is called as “Pre-construction” period. Interest paid during this period is available as deduction in five equal instalments starting from the year in which the property is acquired or construction is completed ( in your case from AY 2020-21). However the principal during pre-construction period, is not eligible for tax deductions.

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