Are you availing tax benefits that your property brings to you?

It’s that time of the year when all of us are busy calculating tax deductions and benefits of investments. However, many of us still don’t know how to calculate taxes and avail tax benefits that our property gives us. In a bid to guide our consumers in the same regard, Magicbricks organised a Gurutalk - a live chat session with Vaibhav Sankla, director, H&R Block. The topic – was “Are you availing the tax breaks that your property gives you?” Here are common questions asked.

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Sneh John has an ongoing home loan for an under-construction flat. Can she avail tax benefits on the same, if any? If not, does she need to wait till possession before claiming tax benefits?

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Sankla says, “In this case one has to wait until you obtain possession to be able to claim tax benefit on the housing loan interest and principal repayments. The tax benefits start only from the year in which you obtain possession of the house. In the year of possession, you would be entitled to claim deduction of interest for that entire year plus one fifth of the interest payable during all the preceding years on this loan”.  

He also said it is wise to note that deduction equivalent to the one fifth of pre-construction period interest is available for each of first five years starting with the year of possession. “The total amount of interest deduction is restricted to Rs 150,000 if the property is self-occupied. Principal repayment deduction too is available from the year of possession. However, no deduction can be claimed on the principal repayments made during the pre-construction period,” he added.

Source:http://content.magicbricks.com/industry-news/delhi-ncr-real-estate-news/are-you-availing-tax-benefits-that-your-property-brings-to-you/80427.html