what is the tax exemption rule for paid EMI of an under-construction housing property?

Question

I own a housing property which is under construction. I took loan for the same and now I am paying the EMI regularly. I have no confusion about the tax exemption for interest paid in EMI. But the confusion is about the tax exemption for the principle amount. I donot have total 1,00,000/- saving. So, a part of principal can be adjusted into it. Can I claim it before getting possession of the property? If so, where shall I get the exact rule in written? Account officer is not aware of the rule of Tax exemption against principal part of EMI. 
Another question is how to declare the percentage of contribution to the loan when I am joint owner of and loan borrower for the same property.

rahul gupta · Accepted Answer

Interest paid will become deductible only after you have received possession of Property. 

The interest paid till the date of possession is called Pre-construction interest and you can claim a 20% deduction each year, for 5 consecutive years, starting from the year in which 
you get the possession of the house.

For Interest you pay after possession, you will get deduction of Rs 1,50,000/-( if it is self occupied)

For Principal you get get maximum benefit of Rs 1,00,000/- under section 80C

http://www.incometaxreturnindia.in/tax_on_house_property.htm

Anonymous · Answer

U can not take exemption in hra Bt u can get exemption Under the head Income from house property of inter st payment

Trending News

what is the tax exemption rule for paid EMI of an under-construction housing property?

2 Answers