Tips n Tax Planning House Property

2. The aggregate of interest (Pre-EMI Interest) paid/payable till the year preceding the year of completion can be claimed in five equal installments from the financial year in which construction was completed.

For e.g.: Mr. A has taken a loan of Rs.7,00,000 @ 14% p.a. on 1 July 2005 for constructing house and construction was completed on 1 Feb 2008. In this case the amount of interest paid/payable for pre-construction period (1 July 2005 to 31 March 2007) 21 months will be allowed in five equal annual installments starting from year in which construction is completed i.e.
700000*(14%)*(21/12) = 171500
Annual installment = 171500/5 years
= Rs.34300


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