When can one claim tax deduction for interest repaid during property construction?
A borrower can start claiming deduction starting from the year in which the construction gets completed or possession is received (whichever is earlier). Deduction can be claimed in equal instalments over five years or till the entire deduction is claimed (whichever is earlier). However, the principal portion repaid cannot be claimed.
What if the interest is not claimed immediately?
From the above example, if one does not claim in the first year, one can do so over the next four years. The borrower will not get extra time for claiming unclaimed deduction. For instance, if construction is completed in 2012-13 and the borrower did not claim in that year and the next (that is, 2013-14), then he/she has time between 2014-15 and 2016-17 to claim the deduction.
A borrower can start claiming deduction starting from the year in which the construction gets completed or possession is received (whichever is earlier). Deduction can be claimed in equal instalments over five years or till the entire deduction is claimed (whichever is earlier). However, the principal portion repaid cannot be claimed.
What if the interest is not claimed immediately?
From the above example, if one does not claim in the first year, one can do so over the next four years. The borrower will not get extra time for claiming unclaimed deduction. For instance, if construction is completed in 2012-13 and the borrower did not claim in that year and the next (that is, 2013-14), then he/she has time between 2014-15 and 2016-17 to claim the deduction.
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