House not completed in 3 years - 30000 or 2 Lakhs deduction?

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  1. Vibhu Kapoor

    Vibhu Kapoor New Member

    Hi,

    I have a construction linked home loan that was sanctioned in FY 2013-14. The flat completion will not be before 2018 (i.e. more than 3 FY). Starting 2018, when i apply for tax incentive towards home loan, will the cap be 2 lacs or Rs 30000 ? Please note that the flat is in Noida and i do not plan to occupy it at any time after its ready. I will be staying instead on rent in Hyderabad

    Regards,
    Vibhu
     
  2. Manoj Mehra

    Manoj Mehra Active Member

    The limit of Rs. 30,000 would apply if you show this flat as Self Occupied.

    However, if you give it on rent - there would be no limit on the interest allowed to be claimed as a deduction under section 24.

    Therefore, it would be better to give it on rent.
     
    Vibhu Kapoor likes this.
  3. Vibhu Kapoor

    Vibhu Kapoor New Member

    Thanks Manoj. This was very helpful. Will the pre-EMI interest paid till 2018 also have no cap to the extent it can be deducted ? I understand that net pre-EMI interest paid towards home loan can be deducted from your taxable income in 5 equal installments starting from the possession year
     
  4. Manoj Mehra

    Manoj Mehra Active Member

    The pre-EMI would also be allowed to be claimed as a deduction under section 24
     
    Vibhu Kapoor likes this.
  5. Vibhu Kapoor

    Vibhu Kapoor New Member

    Thanks Manoj and I assume here that Pre-EMI of all 4-5 years before construction can be claimed for full deduction ?
     
  6. Amit Sahni

    Amit Sahni Active Member

    Yes, Pre EMI of all the years can be claimed as a deduction in case of non self-occupied property.
     
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