Who doesn’t like the idea of tax benefits ? We sure do. We must grab any and every opportunity the government and its laws create for us to save tax. These laws and deductions are given for our benefit; hence it only makes sense that we utilize them. But to utilize these benefits, we first have to be aware of their existence. More often than not, we are not aware of the benefits we are eligible for and our ignorance means missed opportunities. And that is exactly why you should feel lucky, because you have Regrob. We will tell you of where you can save tax, and how you will do it. We like to save your money.
So without further bother, let’s talk about the tax benefits available on your home loan on a property that is under construction.
Tax benefits on under constructions property on home loan
Booking an apartment which is under constructed is sometimes cheaper.
If you have taken a home loan for purchasing under construction property, you can claim tax deduction on the interest paid during the construction year after construction is completed and property possession is given to you but there is no tax deduction on principal repaid during the construction period.
According to Section 24 of IT Act, you can claim deduction against the interest amount that you have paid on your housing property during the pre-construction period.
The total interest paid during the pre-construction period is allowed for tax deduction in five equal installments during five succeeding years from the year in which construction is completed and property possession is given to you. The total interest allowable during these five years will still be capped at Rs. 2 Lakh per year for self-occupied house.
According to section 80C, no deduction against the principal amount will be allowed for the pre – construction period. Click here to read about tax benefit on home loan in India.
Expenses towards repair and maintenance are not allowed as a deduction under income from house property. However, a standard deduction @ 30% of gross value is allowed to compensate for repair and maintenance expenses of a house property. This is allowed irrespective of actual expenses.
If you have more questions popping in your head, head quickly to Regrob and get them answered.
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