Deduction of Principal Allowed Even When Construction is not Completed!
January 6, 2007 by taxworry · Leave a Comment
I have a question about Home Loan Interest & Principal repayment.
I took a home loan in Mid-2005 on an apartment which is under construction. I will get the possession in May 2007. In the meanwhile, I am living in a rented apartment. Is it possible to claim Principal repayment on an under construction apartment? If I can claim principal in this financial year, Can I claim both housing loan Principal & HRA on the rented accommodation? How much is the limit on claiming principal amount? Can I claim the principal that I paid in year 2005-2006? If I can’t claim the principal amount in this financial year, how can i claim for the amount that I have paid since Mid’05. Is it similar to claiming for interest? priya.a@gmail.com
I took a home loan in Mid-2005 on an apartment which is under construction. I will get the possession in May 2007. In the meanwhile, I am living in a rented apartment. Is it possible to claim Principal repayment on an under construction apartment? If I can claim principal in this financial year, Can I claim both housing loan Principal & HRA on the rented accommodation? How much is the limit on claiming principal amount? Can I claim the principal that I paid in year 2005-2006? If I can’t claim the principal amount in this financial year, how can i claim for the amount that I have paid since Mid’05. Is it similar to claiming for interest? priya.a@gmail.com
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Yes you can claim Principal amount without completion of construction.Therefore , you can claom princiapl paid for FY 2005-06.
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You can also claim exemption HRA on rented accommodation because the exemption is for rental payment.
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No principal deduction is not similar to interest deduction. Principal deduction is u/s 80c and interest is under section 24.
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Principal deduction is claimable even when construction is not completed and if you do not claim principal for any reason , you can not claim later on in any other year. But in case of interest , you can claim interest paid upto the date of completion in 5 equal instalment in five years begining the year of completion.
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