I think a person who has paying EMI for home loan can claim for Principal part of EMI even if the house is not completed in current financial year.
It's a fact as in my organization and my 100 friends using this facility. They are living in rented house and their house will be complete in around June 2007 but they are getting tax benefit of Principal part.
RE:Information printed wrong
by adroit on Jun 23, 2006 01:23 PM Permalink
Hi Saurabh!
If the property is not constructed before the end of the financial year deduction under section 80C can not be claimed for repayment of principal in that financial year.
The reason being this deduction under section 80C is available only in respect of "Residential House Property".
The property which is under construction is not a "House Property" under the tax laws.
Thus deduction can not be claimed in respect of house property which is under construction.
Though your payroll has given you a tax benefit, in case your case is selected by tax department for scrutiny (chances of which are very rare) , the deduction, which is wrongly claimed, would be definitely disallowed.
Further, your employer would also be made to pay penalty for allowing incorrect tax deduction.
RE:Information printed wrong
by viswanath on Jun 14, 2006 06:39 PM Permalink
Pre EMI can be claimed only after the house is ready for possession at the rate of one/fifth of the the total pre/emi paid.
