Tax exemptions on housing loan
ARjun V Ajith
(Querist) 19 February 2017
This query is : Resolved
Hello,
I have taken a housing loan for the construction of a house in 2016 Feb. I was paying Pre- EMI ( only interest components) for the disbursed amount during the construction period. Construction is getting completed by this March end. Am I eligible for tax exemptions for this Pre- EMI amount (1.3 Lakhs approximately) paid during the 2016-17 FY? Is this Pre- EMI possible to claim only after the completion of construction in an installment of 5 year duration. In that case after completion of construction, I am supposed to pay the full EMI( prin + int component) which is sufficient for the full tax exemption for my total income in the next FY. Hence even if I add 1/5 of the Pre-EMI value to the Full EMI, does not make any benefit. Then how can I reimburse the tax paid during 2016-17 FY in the subsequent 5 years after completion of construction? Kindly clarify my doubts.
B.Chakrapani Warrier
(Expert) 20 February 2017
(1) 1/5 th of the pre-construction period can be claimed from the year of completion.
(2) If EMI {interest u/s 24 (b) and principal u/s 80 C} is sufficient to cover for tax benefit, as you know, benefit of the above said interest will loose.
(3) Income tax paid in the pre-construction period can't get back in the herein above situation.
