I have taken an SBI loan of Rs 40 lakhs for purchasing a flat which is under construction.
I started paying EMI since May 2020.
I would like to know whether I can avail I-T benefit for the year 2020-21.
Some people told me that you can avail tax benefit only after the flat is completed and the builder hands over the keys.
Ans: You can claim the tax benefit on your flat only once the flat is handed over to you by the builder, on completion of construction.
You can claim the deduction for the accumulated pre-EMI interest (while the property is under construction) in five equal installments by adding it to the normal interest of that year.
However, keep in mind that the total interest that you can claim in a year is restricted to Rs 2,00,000.