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Pre-contruction interest on self occupied

Gangadhara (Professional) (62 Points)

18 March 2013

Dear Sir,

I paid interest of 1,00,000.00 during FY 2011-12 . I got the occupancuy of the house in Jan 2013. Have paid interest of 4,00,000.00 in the FY 2012-13

Question:

In the FY 2012-13 and I eligible to claim 1,50,000.00 + 20% of 1,00,000.00

Only 1,50,000.00?

Thanks

Gangadhara

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5 Replies

Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 18 March 2013

Overall limit is Rs.1.50,000. So you can claim only 1.50lacs towards pre-construction interest and interst paid for current year.

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Gangadhara (Professional) (62 Points)
Replied 18 March 2013

Uhhh...

In that case practically there is no chance to claim the pre construction interest for property which has more than say 30L loan.

I do not think the housing fincnace market in india has interest so low that the total interest falls below 1.5 in first 5 years. Do they?

Gangadhara (Professional) (62 Points)
Replied 18 March 2013

I am assuming the Pre-Construction interest can nly be clined ONLY for hte FIRST five years after and including the occupancy year.

Is my assumption correct?

Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 18 March 2013

Suppose if you get the possession of the flat in say Current F.Y. 2012-13 then the interest paid upto MAr12 would be eligible for deduction in 5equal installments from F.Y. 2012-13 & onwards till MAr17.

And the interst paid for F.Y.2-12-13 plus 1/5th of the pre-constuction interest subject to an overall deduction of 1.50 lacs only can be claimed from the taxable income.