Dear Sir, My home loan from HDFC Ltd was disbursed in feb.2007 but possession of built up house taken from Greater Noida authority in July 2010 (after 3 years periods). physical possession of the house was taken after one year i.e. in 2011. during this period house was not self occupied.please tell me how i may get tax rebate as per law?
The interest for the period from feb 2007 to march 2011, will be allowed as deduction in 5 equal instalments from the financial year 2011-12 i e asst year 20012-13.
The interest for the financial year 2011-12 will be deductible in full upto Rs 1,50,000 from asst year 2011-12 to 2014-15 and from asst year 2015-16 Rs 2,00,000. But the loan must be sanctioned for construction of house and not for any other purpose.
The acquisition of house is complete when the possession of the house was handed over to you in July 2010. Though the physical possession was taken over only in 2011, it may be construed that the house was vacant during the period from July 2010 to 2011.
The interest payable on your housing loan upto the date of possession will be allowed as a deduction u/s 24 of the Income Tax Act in 5 equal annual installments during the financial years 2010-11,2011-12,2012-13,2013-14 and 2014-15.
I am not sure whether you claimed the interest for the years 2010-11 to 2012-13 in your Income Tax returns. If you have not claimed, you cannot claim now, as you will not be able to file revised returns also. If you have not filed IT returns for these years, you cannot file them now, because the time for filing voluntary returns is over.
You can claim the interest only for the financial years 2013-14 and 2014-15 by filing returns. If you have already filed income tax return for the financial year 2013-14, you can file revised return before 31st March 2016 or the completion of your assessment. However, if you have filed return for the FY 2013-14 after the due date, you cannot file revised return.
You can claim interest whether the house is self occupied or let out.
Dear Tax payer,
It is very unfortunate to inform you that as per the Income-tax Act, 1961, you are NOT eligible to claim interest on borrowed capital to the extend of Rs. 1.5 Lakhs/Rs. 2 Lakhs as the case may be due to the following provision of the IT Act:
Extracts of Section 24 (b) of the Income-tax Act, 1961
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"Provided further that where the property referred to in the first proviso is acquired or constructed with capital borrowed on or after the 1st day of April, 1999 and such acquisition or construction is completed WITHIN THREE YEARS FROM THE END OF THE FINANCIAL YEAR in which capital was borrowed, the amount of deduction under this clause shall not exceed two lakh rupees.
Case Analysis
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1. Amount Borrowed in Feb 2007
2. End of Financial Year 31 March 2007
3. Three years from the end of Financial Year 31 March 2010.
4. Possession taken officially from Greater Noida Authority July 2010 which is after 3 years from the end of the financial year in which the loan was taken.
Hence, you are NOT eligible for normal IT exemption claim of Rs. 1.5 Lac or 2 lac u/s 24(b) from your income.
Regards,
CA. Rajeev P T
Partner @ Rajan Chakravarthy & Associates, Chennai
Email: ca.rajeevpt@gmail.com
As far as interest is concerned you can get tax rebate for interest from the year of possession i.e. when the construction is completed. Before that the pre construction interest can be claimed in 5 years from the date of completion of construction.
