How to consider Pre-emis when construction completed in same year of availing loan

POSTED BY Muthu ON August 6, 2012 1:37 am COMMENTS (2)

Hi,
Suppose I start the construction of my house in June 2012 and complete it in November 2012.
I avail a home loan and get the first disbursement by July 2012. Since then, I start paying pre-emi (around 80000 totally) till November.
From December 1, I start paying my EMI.
From the bank’s statement, I can know the principal and the interest component of my EMI.
But, the pre-emis can be considered only till the Financial year before the Year of completion of the construction (i.e., 2011-2012 : when I have not even started the construction and did not get loan) and then distribute equally into 5 parts in future years.
Since all these things happen in same financial year, please guide me how to claim the pre-emis.

Can this amount of 80000 be added to interest part of this year, along with the interest component of the EMIs?

2 replies on this article “How to consider Pre-emis when construction completed in same year of availing loan”

  1. Muthu says:

    Thank you very much Ashal. That perfectly clarifies my question.

  2. Dear Muthu, if the loan disbursal & completion of house happens in the same FY, the Pre EMI’s or the interest paid out ‘ll be added to the interest in the running EMIs.

    For example – in your given case – say 70K is the interest from dec to march period in full EMI, the total interest under consideration for the purpose of tax benefit ‘ll be 80K+70K = 1.5L Rs.

    Thanks

    Ashal

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