Pre EMI Tax Benefit Doubt

POSTED BY Reji m ON May 27, 2013 8:01 am COMMENTS (10)

I’ve booked an apartment, the expected delivery time is 2 years. During this time, approximately I would be paying 8.5 Lacs as interest. I am hoping to close this loan just after registration. So if the loan is closed can I claim the pre emi interest (8.5/5=1.7 per year) in 5 installments? 

10 replies on this article “Pre EMI Tax Benefit Doubt”

  1. Reji m says:
    May 27, 2013 at 4:49 pm

    Thanks Ashal

    Reply
  2. Ashal Jauhari says:
    May 27, 2013 at 3:21 pm

    Dear Reji, as the construction period is starting from now, the dates are very important for you. Please consult a Tax professional in your case.

    Thanks

    Ashal

    Reply
  3. Reji m says:
    May 27, 2013 at 3:14 pm

    I will sell the property before the registration.

    Reply
  4. Ashish Garg says:
    May 27, 2013 at 3:10 pm

    Hi,

    As far as I understand, repaying home loan using the long term capital gains will not be considered as invested in the real estate and you may end up paying capital gains tax on the earnings. Also I think your selling of the old property would be later than the registration date of the current/new property.

    Ashish

    Reply
  5. Reji m says:
    May 27, 2013 at 3:01 pm

    The new property cost is 90L, I am taking a 70L loan. I am expecting 65L from my old home. Capital Gain is approximately 16L. The total loan amount is still higher than expected sale price of my old home. Ashal do you see any issue here?

    Reply
  6. Ashal Jauhari says:
    May 27, 2013 at 2:43 pm

    Dear Reji, yes, make your calculation perfect to avoid any last minute surprises.

    thanks

    Ashal

    Reply
  7. Reji m says:
    May 27, 2013 at 2:07 pm

    Ashal, I hope you are referring to capital gains tax, if you invest this amount in a new property then we don’t have pay any tax right?

    Reply
  8. Ashal Jauhari says:
    May 27, 2013 at 11:22 am

    Dear Reji, what about the tax liability on the sell proceeds of old property?

    thanks

    Ashal

    Reply
  9. Reji m says:
    May 27, 2013 at 9:34 am

    I’ve another property, I will sell that once this new flat is ready. The proceeding from the sale, I will use it for closing the loan.

    Reply
  10. Ashal Jauhari says:
    May 27, 2013 at 9:29 am

    Dear Reji, the answer is yes. But my counter question is, why do you want to close the loan immediately after registration?

    Thanks

    Ashal

    Reply

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