What are Pre EMI Interest tax benefits ?

POSTED BY amolwable ON January 3, 2014 12:20 pm COMMENTS (5)

Hello Guys,
 
I had booked flat in Feb 2012, taking possession this month (Jan 2014). Till Now I’ve paid Pre EMI around 5 Lakhs.
 
Below are details(not actual figures 🙂 ):
  • Pre EMI(Interest):
  1. Feb 2012 – Mar 2012 = 20,000
  2. Apr 2012 – MAr 2013 = 200,000
  3. Apr 2013 – Jan 2014 = 280,000
  • EMI(only Interest):
  1. Feb 2014 – Mar 2014 = 40,000
 
So, My question is how much I’ll get tax benefits under section 24,
 
Case 1 : 20 % of Total PEMI + EMI Interest
 
(500,000*20%) + 40,000 = 140,000
 
Total benefits: 140,000
 
OR
 
Case 2 : 20 % of Total PEMI paid till last financial year + Current financial year PEMI + EMI Interest
 
(220,000*20%) + 280,000 + 40,000 = 44,000 + 280,000 + 40,000 = 364,000
 
Total benefits: 150,000 (as 150,000 is max limit for sec 24)
This may be silly question for you guys but I need to clear my doubt. 
 
Thanks and best wishes

5 replies on this article “What are Pre EMI Interest tax benefits ?”

  1. ashalanshu says:

    Dear Amol, I’m happy that you now have the clarified view with you. 🙂

    Thanks

    Ashal

  2. amolwable says:

    Thank you Ashal for clearing my doubt.
    So the Current year’s interest is nothing but PEMI (Apr2013 – Jan2014) + EMI Interest (Feb2014 – Mar2014).
    I was having confusion for calculating total interest for current year.

    Thanks again.

  3. ashalanshu says:

    Dear Amol, the property in question is going to be self occupied, the maximum interest available for tax benefit is 150000 Rs. As your current year’s interest is more than 150000 Rs. you can neither claim any benefit on the residual interest of current year nor on uinclaimed interest of prev. year.

    thanks

    Ashal

  4. amolwable says:

    Dear Ashal, It’ll be self occupied.

    Thanks

  5. ashalanshu says:

    Dear Amol, the house in question ‘ll be self occupied or on rent?

    Thanks

    Ashal

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