Sign in with Facebook
Sign in with Facebook

User Rating: 5 / 5

Star ActiveStar ActiveStar ActiveStar ActiveStar Active
A home owner will be able to take tax exemption on home loan even if the house construction gets completed within five years from the year in which loan was taken.  
The recent budget 2016 did not bring much relief to common people. There was no change in slab rates or percentage. However, some relief has been given to those who plan to buy or have recently bought a house under construction. This change in period allowed, though small, can lead to a lot of saving for normal home buyers. 
Delays in construction have been a leading cause for increase in effective cost of houses for buyers. Currently, home buyers get a tax exemption of 1.5 lakhs for principle under section 80C and Rs. 2 lakhs for interest under section 24b for a self occupied house. For a rented house, the owner can get unlimited tax exemption on interest. We have written more on this in the article 'Income tax benefit on home loan and HRA exemption'. However, when buying an under construction house the exemption can be obtained only after the construction is completed and ownership is obtained. However, the time period within which such construction can be completed is three years.  If this house doesn’t get completed within three years, then the interest on home loan gets reduced to Rs. 30000 per month. 
Proposed change in budget
The finance minister has proposed to increase the duration for construction of houses from three years to five years. Once implemented, owners will be able to take advantage of home loan tax exemption upto Rs. 2 lakhs if construction gets completed within five years from the year in which home loan was taken. 

Add comment

Security code

Want quick reply to your question? Post it to the Forum and get quick and prioritized reply! For questions on posting to forum, please read article on how to post a question in the forum.

Latest News

Demonetization has not affected prices of properti...
23 Jul 2017 10:47 - Krishna

Recent studies show that in the first quarter of 2017, prices of under construction properties in De [ ... ]

Clarification on registration of unapproved plots ...
21 Jul 2017 06:00 - Krishna

Clarifying its stand on registration of unapproved plots, Madras High Court has allowed registration [ ... ]

Things to know about GST
20 Jul 2017 07:06 - Krishna

GST has been applied as a law and has a few things that need to be confirmed as a part of its enforc [ ... ]

GST on under construction properties to be charged...
18 Jul 2017 05:25 - Krishna

The Goods and Services Tax (GST) schedule approved by GST council mentions that all under constructi [ ... ]

Impact of GST on properties: Should you buy now or...
17 Jul 2017 05:39 - Krishna

The complete impact of GST has still not been realized. So as a homebuyer, should you wait or buy a  [ ... ]

Featured News

You can take five years to make use of interest ra...
04 Mar 2016 10:22 - Krishna

A home owner will be able to take tax exemption on home loan even if the house construction gets com [ ... ]

Procedure to obtain E Khata for a property allotte...
13 Oct 2014 03:53 - Krishna

E khata has become an important document for almost all new buyers. If existing home owners wis [ ... ]

Free Encumbrance certificate (EC) online for Tamil...
16 Jun 2014 04:01 - Vijay Viswanathan

In an effort to reduce corruption and increase transparency, the State Government has initiated a ne [ ... ]

Subscribe to News

Sign in with Facebook