mani (Audit Manager) 11 February 2009

Can Interest on housing loan be claimed during construction period ?

If the interest is paid on housing loan taken and the house is still under construction, can the assesee claim benefit under section 24 of Income tax Act ? Is it mandatory for the assessee to produce a CONSTRUCTION COMPLETION certficate to the Housing loan financing bank to get Income tax benefit during the financial year ?

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S K R P GUPTA (ADVOCATE & TAX CONSULTANTS) 12 February 2009

I will answer the second question first, then first.

1. it is mandatory to furnish the CONSTRUCTION COMPLETION certficate.

2. Interst if any payable by an assessee in respect of funds borrowed for the acquisition or construciton of house property and pertaining to the period prior to the previous year in which such property has been acquired or constructed, shall be deducted in five equal instalments commencing from the previous year in which the house was acquired or constructed and each of the four immediately succeeding previous year.