Pre construction interest

How to claim Pre construction interest?

Hey Shrey,

The Pre-construction Interest, is allowed as a deduction in 5 equal installments starting from the year in which the construction of the property is completed.

In order to claim such pre construction interest the taxpayer needs to file ITR-1 if no co-owner is present. Otherwise, you need to file ITR-2.

Need a clarification on Pre construction interest. I have availed a home loan in June 2020 & house construction got completed by March 2021. I have paid EMI from June, 2020 to March 2021. This includes interest of some 33000 rupees.
Do I need to claim this as preconstruction interest in 5 installments or can I claim it fully in FY 2020-21 itself, as my loan taken date & construction completion date falls in same FY 2020-21 ?

@Saad_C @Kaushal_Soni @Divya_Singhvi @Laxmi_Navlani @AkashJhaveri can you help with this?

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Hey @Sivaprakash_S

The deduction for pre-construction period interest is allowed in 5 equal instalments starting from the year in which the house is purchased or the construction is completed.

Here in your case, as completion of construction and interest payment period falling under the same year ie. FY 2020-21, then you can claim entire interest expense while filing ITR for FY 2020-21.

Read below article for more insights about pre-construction period:

Hope, it helps!

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@Kaushal_Soni Thank you for your response :slight_smile:
@Nireka Thank you too :slight_smile:

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