Income Tax Filing: Home Loans For Property Under Construction
Date: 17-03-2017 Views: 992
The important things to remember during income tax filing if you have taken a home loan for a property under construction.
Edited transcripts
Udayan Ray: Hi there! Welcome to FundooMoney. As part of our web series on filing taxes, in this segment, we will be discussing the kind of deductions one gets when one has taken a home loan and the property is under construction. The great news is that with me is eminent tax expert, Swami Saran Sharma who is going to give us some insights into this aspect. Welcome Swami!
Swami, one of the things that people would be interested in knowing is that there are a lot of people who buy properties under construction and you actually need to go for a home loan. When you are filing for taxes, what are the things that you need to keep in mind and what are the (tax) deductions you get?
Swami Saran Sharma: Udayan, there are two types of (tax) deductions when you take a loan to construct a house. One is the return of the principal and the other is the payment of interest of the loan raised.
As far as return of principal is concerned, it continues to qualify (for tax deduction) from year one under Section 80C.
As far as interest payment for under construction property is concerned, it is actually accumulated till the property is ready and given possession of. So, the entire amount of collected interest is allowed to be written off in the next fears in five equal instalments subject to a maximum eligibility of Rs 2 lakh.
Udayan Ray: So, these are useful tax deductions for people and the same ones people buying ready-to-move-in apartment or houses get.
This information is useful to people and people can ask more questions to a credible tax expert. For more information, people can connect with us on our social media platform or to our site www.fundoomoney.com
