Query regarding Home loan Deduction from Income Tax

POSTED BY Tarun ON October 29, 2012 11:01 am COMMENTS (2)

Hi,

I bought a under construction home in 2010. My loan started in May 2010. From May 2010 to January 2011, I paid the interest only and then from February 2011 I started paying my EMI as well.  Now in september 2012, I have got the pocession of the property. 

My question is regarding the deduction from the Income Tax-

1) I have not claimed any deduction with respect to the interest paid in financial year 2010-11 and 2011-2012 as possession of property is required to claim the same. How can I claim the same now?

2) What all documents are required to be submitted in order to claim the inteest of the previous year and for the current year.

3) what documents do I require to claim the principal amount of the home loan u/s80C for current financial year. 

Regards

Tarun

2 replies on this article “Query regarding Home loan Deduction from Income Tax”

  1. Dear Tarun, please ask your bank to provide Income Tax Certificate with break up of interest & principal for each FY.

    As you get the possession in FY 2012-2013, full interest in current Fy is available for tax benefit within the over all limit of 1.5L Rs. for self occupied property. To claim prev. FY’s interest, please add the same @ 20% in each FY from here onwards but do remember if the property is self occupied, the interest benefit is limited to 1.5L Rs.

    The principal figure quoted by bank in certificate ‘ll be available for your section 80C related tax benefit.

    thanks

    Ashal

  2. Biswa Singh says:

    You can avail the deferred deduction on the interest payable during the uderconstruction period. You can avail tax benifit on the entire interest amount paid in 5 equal installments from the financial year the construction is complete.

    So whatever interest you have paid until septermber 2012, divided into 5 and claim tax benifit on it for coming 5 years starting form this year.

    You need to show the statment of account of your laon to get this tax benifit. If you are not sure then please consult you bank for the laon statement.

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