How To Claim Tax Benefit On Home Loan For Under Construction Property

Any interest paid before possession is tax deductible in five instalments beginning from the year in which construction was completed subject to a cap of Rs 2 lakh if the property is self-occupied. Hence if you get the possession by the end of March 2021 you can claim deduction for interest from the current financial year.

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This is why an individuals income from house property is taxed based on its potential to earn a particular amount as rent even if the unit is lying vacant.

How to claim tax benefit on home loan for under construction property. Under Section 24 b of the Income Tax Act tax deductions can be claimed on any interest that is paid on a home loan for a self-occupied property. A property still under construction will not have any kind of tax for interest paid on EMIs under Section 24 of the Income Tax Act. A home loan for an under-construction property can get tax deductions up to Rs.

However to make property purchases more lucrative the government offers various tax benefits especially if the property has been purchased using a home loan. There is no maximum limit for claiming tax deductions for not self-occupied property. 4 The interest amount paid prior to the year of completion is accumulated and 15th of this amount is allowed as deduction each year for 5 years from the year of completion.

You can claim tax deduction up to Rs 15 lakh under Section 80C for repayment of principal component of a home loan availed for purchase or construction of residential property. Tax benefit on interest payment You can claim deduction for interest payable on a loan taken for purchase construction repair or renovation of any property whether commercial or residential under Section 24 b. How to claim tax deduction on interest portion us 24 and principle por.

Once you get Possession certificate you can claim tax benefit. The standard deduction is 30 of the net rental income. Tax deduction can be availed only if the construction of the housing property is completed within 5 years of taking home loan.

14 hours agoFor interest on home loans the tax benefit is available under Section 24b. A tax deduction up to 2 Lakhs on the interest payments made in a year and up to 15 Lakhs towards the principal amount made under Section 80C of the Income Tax Act. In view of the fact that housing projects often take longer time for completion it is proposed that second proviso of clause b of section 24 be amended to provide that the deduction under the said proviso on account of interest paid on capital borrowed for acquisition or construction of a self-occupied house property shall be available if the acquisition or construction is completed within five.

If the home loan taken is not for self-occupation purpose then whole interest amount can be claimed as tax deductions under Section 24. Tax benefits on an under-construction property are not applicable if the home. Municipality tax Property tax The municipality or property taxes paid during the financial year can be claimed as deduction.

1 As you have not yet got the possession of property you or your spouse can not claim tax benefits on home loan. If you are salaried you can submit PC and home loan statement to your employer as. However for properties that have been rented out this deduction will be partially available under the new tax regime.

After completion however the taxpayer can claim deductions on the interest on home loan paid for the under-construction period in 5 equal instalments from the year in which the construction is completed. Along with property ownership comes the responsibility to pay taxes. Under Section 24B of the Income Tax I-T Act you can claim deduction for interest payable on a loan repair renovation or construction.

This video is about home loan benefit on under constructionpre-constructed property. It is claimed on accrual basis not on payment basis. This deduction on interest payment is available for any residential or commercial property owned by you.

Until the property is constructed and a certificate is issued stating the same no tax benefits can be claimed on the home loan. For a maximum of two self-occupied properties taken together you can claim upto Rs. 2 lakhs on the interest paid in a year and up to 15 lakhs for any principal paid under Section 80C of the Income Tax Act.

But if you own only one house which is self-occupied the upper limit of deduction on interest payment is restricted to Rs 2 lakh per annum. Simply put the interest paid on the home loan during the pre-construction phase can be availed. If you have a home loan for an under construction property then it is possible to claim for tax deductions.

You can claim the following deductions from this head apart from the interest paid on the loan.

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