Home loan interest

Home loan interest

I have a Home Loan, against a Property.
- Loan Started in Oct-2011. (Under construction apartment purchased from a Builder).
- Construction completed on 23-Mar-2016, Builder offered Possesion on 23-Mar-016.
- I paid all pending dues, completed Builder specific formalities and got Possesion of the Flat on 31-Mar-2016.

I have also changed my job 2 years back and hence living in a different city now.

Now, for this flat for the Financial Year - 2015-16, how should I claim the tax benefit on Home ;Loan 
interest, for current year and pre-construction years.

Q1. Can I consider this flat as Eligible for Home Loan benefit, given the fact that possesion given/possesion certificate has been issued by builder to me on 31-Mar-2016?

Q2. As currently this is vacant and is in a different city, can I consider this as Deemed Let out property?

Q3. In case of deemed let out, What should be the fair rental value. Prevailing Monthly rental in that area is 6000-8000/- per Month. (please note that I have got possesion on 31-Mar-2016).

Please help in clarifying this?

Asked 8 years ago in Income Tax

As per our view You are eligible for Housing loan benefit for FY 2015-2016. For the pre construction period you can claim interest for next 5 years 1/5.

For the current FY 2016-2017 you can treat it as deemed let out at FMV in that area.

Shyam Sunder Modani

CA, Hyderabad

1409 Answers

164 Consultations

Talk to Shyam Sunder Modani

Thanks, 
For the financial Year, 2015-16, as we received the possession in the end (31-Mar-2016),what should be the FMV. Prevailing rent in that area lies in 6000-8000/- per month. for FMV, can I consider just one month rent (as the possesion is done Mar-2016).

Asked 8 years ago

No need for showing deemed let out in FY 2015-2016 as u received possession in Mar16

Shyam Sunder Modani

CA, Hyderabad

1409 Answers

164 Consultations

Talk to Shyam Sunder Modani

Dear Sir,

1. Since property has been constructed in more than 3 years, you can claim interest deduction but maximum upto 30000.

2. Yes, you can consider.

3. You can take FMV for 8 days.

Please feel free to call/revert in case of any doubts

Thanks and Regards

Abhishek Dugar

CA, CS, B.Com

Abhishek Dugar

CA, Mumbai

3576 Answers

183 Consultations

Talk to Abhishek Dugar

Dear Abhishek, Thanks for your reply.
For Q1, Being Vacant, If it is Deemed Let out property, than there is no upper limit for interest Deduction. Is that correct?

Asked 8 years ago

Yes you are correct. I skipped that point.

Further, the amount of interest which you can claim would be 1/5 of total interest paid till 23 March 2016

Please feel free to call/revert in case of any doubts

Thanks and Regards

Abhishek Dugar

CA, CS, B.Com

Abhishek Dugar

CA, Mumbai

3576 Answers

183 Consultations