Benefit under section 24

[naresh makkar]

My wife booked a flat in Ashiana Utsav Bhiwadi in March,2006. The flat is under construction and possession is likely to be offered in March,2008. She raised a loan of Rs.15.95 lacs for this flat from HDFC in Apri,2006. She is regularly paying her EMI's since May,2006. Kindly let me know if she can claim the benefit of repayment of Principal and intt under section 24 (Loss on house property) for the F.Year 2006-07 and F.Year 2007-08

[Surender Gupta]

The interest would get accumulated till the acquisition of property. Since you did not possess the property, the benefit of deduction of interest is not available

[Guest]

Interest on repayment of loan paid in the financial year on which the house is acquired/construction is completed is eligible for deduction u/s 24 in the same financial year. Interest on EMI paid relating pre-construction period is eligible for deduction in five equal instalments only from the financial year in which the property is acquired/construction is completed. Repayment of principal is eligible for deduction u/s 80C from the financial year of construction/acquiring of house property.

[Guest]

the interest accumulated till 31.03.2007, can be claimed in 5 equal installment from the financial year 2007-08.The interest paid for 2007-08 can be claimed as loss from house property up to rs. 1.50 lakhs, and the payment of principal can be claimed under sec. 80 c to ccc as deduction limited to rs. 1.00 lakhs.pl note that for availing the benefit of interestand principal the house should be ready and in possession before 31.03.2008

AI Summary

Eligibility for Tax Benefits on Home Loan: Section 24 Interest Deduction and Section 80C Principal Deduction Explained A query was raised regarding the eligibility for tax benefits on a home loan under section 24 of the Income Tax Act for a flat booked in 2006, with possession expected in 2008. Three responses clarified that interest paid during the pre-construction period can be claimed in five equal installments starting from the year of possession. The principal repayment is deductible under section 80C from the year the property is acquired. Deductions are contingent upon the property being ready and in possession by March 31, 2008.