Why is there a Cap of 3 years for Construction of House?

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  1. Durgesh Jharbade

    Durgesh Jharbade New Member

    Dear Sir,
    I want to understand
    1. Why Income tax authority have kept a cap of having the construction completed within 3 years financial year of the loan taken to take advantage of section 24 (Tax benefit on account of interest on home loan) for an property which is under construction. What is the rational behind the same as most of the builder do not give possession of flats within 3 years?
    2. What is the solution for the above?

    regards
    Durgesh
     
  2. Anand Jain

    Anand Jain Member

    At the time of the framing of Section 24, many taxpayers use to take a loan for home construction but used to use it for other purposes.

    Therefore, the cap of 3 years was introduced.
     
  3. Anand Jain

    Anand Jain Member

    However, times have changed and I understand that nowadays, many builders are unable to complete the construction in 3 years.
     
  4. Durgesh Jharbade

    Durgesh Jharbade New Member

    Hi Anand,
    Thanks for your information however, since the construction is not in buyers hand, can a plea be taken on these grounds in case of purchase from a builder.
    Or an appeal in court at least to demand for change in law in such situation where it is out of control of the buyer and all the proof is available that the loan has been invested in buying property only.

    Regards
    Durgesh
     
  5. Anand Jain

    Anand Jain Member

    I was expecting that maybe the govt may change this norm on its own.
     
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