Can I Claim Tax Benefits on My Home Loan for an Under-Construction House? Seeking Legal Insights

Hi,

I would like to invite suggestions, comments, or feedback from all you learned legal professionals regarding a doubt about my tax implications on a housing loan.

I have availed a home loan for an under-construction house from SBI. According to the loan scheme's terms, although the bank has been disbursing funds partially for the home under construction, the bank has started collecting full EMIs on the entire sanctioned loan amount from the first day of disbursement (partial disbursement). The scheme states that the EMI includes interest on the disbursed amount and the rest goes towards principal repayment. Additionally, as per the agreement between the builder and me, the house is expected to be completed within 24 months.

As per the terms, SBI has issued a certificate detailing the principal and interest collected from me for the current financial year.

Now, as part of the investment declaration for the financial year for income tax calculation, my company has requested proof of the loss from home. They require submission of the principal/interest deduction statement only for a fully constructed house. I am curious to know if I am paying the principal and interest on my ongoing home loan, shouldn't I be eligible for a tax benefit on it? Is there a rule that specifies that a home loan (principal/interest) can only qualify for a tax rebate for a fully constructed house?

I would greatly appreciate it if you could share your valuable insights on the matter.

Thank you in anticipation.

Indrani Chakraborty

Dear Sir
Thank you for your reply and clarifying the situation.
However, as you rightly mentioned, that tax exemption qualifies only after possession for the pre-EMI paid during the year of construction(i.e only after actual EMI starts).
However, I would like to emphasize that I have been paying the actual EMI (and not pre-EMI) even for the under construction house. This is as per the loan scheme extended by SBI, wherein the EMI is started from the day of first disbursement of the part payment. All the calculations, i.e interest and principal from the EMI is same as it would have been, had it been a constructed house with full disbursement.
SBI has even issued a certificate stating the EMI amount and the split of the amount into the principal and interest deducted from the same.
Would this scenario qualify for the income tax deduction u/s 80C and 24B?
Please guide me on the same
Waiting for your reply
Thanking you in anticipation
Indrani Chakraborty