You can declare curiosity paid for house mortgage totally repaid earlier than possession

I took a house mortgage in 2021. I’ll get possession of my flat in 2024 (tentatively). I’m paying common EMI since 2021, inclusive of Principal & Interest each, however haven’t been claiming any rebate in my Income Tax Return as I’ve but to get possession of the flat. If I repay the total excellent quantity of my house mortgage now in 2023, can I declare a rebate on curiosity paid until at this time after getting possession in 2024, as I’ll have the house mortgage totally paid even earlier than getting possession?  

Under revenue tax legal guidelines, the tax advantages in respect of house loans beneath Section 24b (for curiosity) and beneath Section 80C (for principal reimbursement) can solely be claimed from the yr through which the possession of the home is obtained. In respect of curiosity paid for the years previous to the yr of possession, the taxpayer can declare 1/5 of the mixture of such curiosity within the subsequent 5 years starting from the yr of possession together with the curiosity payable for the present yr. However, an analogous profit will not be accessible in respect of principal reimbursement made previous to the yr of possession. 

This curiosity could be claimed beneath Section 24(b) even when the house mortgage is repaid previous to the yr of taking possession. There is nevertheless provision for reversal of tax advantages claimed beneath part 80C in respect of house mortgage reimbursement if the residential home is bought inside 5 years from the top of the yr through which the house mortgage is taken. So it is possible for you to to say 1/5 of the curiosity paid previous to the yr of possession in 5 years starting from the yr of possession. Please observe you will be unable to say any deduction in respect of the principal quantity repaid previous to getting the possession.

Balwant Jain is a tax and funding professional and could be reached at jainbalwant@gmail.com and @jainbalwant on his Twitter deal with.

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Updated: 22 Jun 2023, 08:04 AM IST