Pre - EMI is a burden. How can rediff miss the tax benefit of 1.5 lacs (interest comp) and 1 lac (principal comp) which one gets if he chooses ADF option. In Pre EMI one can only claim over a span of 5 years which is a long term. Also pre - emi doesnt reduce your Principal outstanding loan amount. All pre-emi is contributed to Interest component of the Loan amount. In ADF option , principal and interest both get subtracted
Re: I dont agree with Rediff's analysis
by Meetu Meetali on Feb 22, 2012 12:21 AM Permalink
You need to remember that Sec 24 benefit of 1.5 Lacs & principal of upto 1 lacs under sec 80c is only available upon possession of house. So for uder construction property even if you pay EMI you can't claim it
Re: I dont agree with Rediff's analysis
by Murali on Jan 26, 2010 01:06 PM Permalink
Thats not correct. If you opt for Pre emi, the balance principle should be invested somewhere and when you actually start the emi, pay this accumulated money to the loan itself. So, your principle also gets reduced. I think, pre emi is always better and profit making.
Re: I dont agree with Rediff's analysis
by Murali on Jan 26, 2010 01:07 PM Permalink
Thats not correct. If you opt for Pre emi, the balance principle should be invested somewhere and when you actually start the emi, pay this accumulated money to the loan itself. So, your principle also gets reduced. I think, pre emi is always better and profit making.
