How to claim interest on home loan before possession ?

Just the other day, someone asked me:

can I claim home loan interest before possession.

I think you want to know the same thing. The answer is: you can claim the interest on a home loan before possession under certain conditions. The provisions related to claiming pre-construction interest are covered under Section 24(b) of the Income Tax Act. Here are the key points to consider:

Under Section 24(b), you can claim a deduction for the interest payable on the capital borrowed for the acquisition, construction, repair, or renewal of the property.

The interest paid during the pre-construction period can be claimed in five equal installments starting from the financial year in which the construction is completed.

The total interest paid during the pre-construction period is aggregated, and one-fifth of the total is claimed each year.

The maximum deduction allowed under Section 24(b) for interest on a home loan is Rs. 2 lakh for self-occupied properties. There is no upper limit for let-out or deemed let-out properties.

How Can I Claim Interest on Home Loan Before Possession?

To claim the deduction, you need to obtain the completion certificate for the property. The completion certificate is proof that the construction is complete.

Maintain proper documentation of the loan disbursements during the pre-construction period. This documentation will serve as evidence of the amount spent on the property.

Obtain an interest certificate from the lender specifying the interest paid during the pre-construction period.

While filing your income tax return, you can claim the deduction under Section 24(b) by providing the necessary details of the interest paid during the pre-construction period. Well,

can we claim home loan interest before possession

is explained.

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Hey there, As you must have known there are different sorts of home loans being given by banks. One of the most important factors to consider is the interest rate. In case, you didn't know you can get a home loan interest claim before possession. Read my answer to know more details about the same ?

There are certain deductions that can be claimed on interest paid of home loan.This decdiction can only be claimed once the property is ready for occupancy. The interest that is paid before the possession of the property is tax deductible in five installments. The installment period starts from the year in which the property construction was completed . This means that tax deduction can be claimed in five subsequent years in five equal installments.

Under Section 80C of the Income Tax Act,  one can claim deduction on the principal amount of the home loan. To claim this tax deduction, the newly constructed property should not be sold within five years of possession.

There are more benefits that can be claimed in accordance with Section 24 and Section 80EEA of the Income Tax Act. If you can fulfill the terms and conditions along with the eligibility criteria of the aforementioned sections. Then submit the  home loan interest claim before possession.

This is all from my end. Remember to keep a track of the deduction amount and the occupancy status. Hope this helps you know home loan interest claim before possession

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