Pre EMI interest and Interest on EMI – Tax benefits

POSTED BY Rajeev Chugh ON June 8, 2013 3:22 pm COMMENTS (5)


1.I have taken a loan of Rs 25,00,000 from govt loaning agency which does not have a provision of EMI before possession.

2. I paid a total pre EMI interest of 2,15,000 from Aug 10 to Apr 12. Thereafter EMI from May 2012. Paid an interest of about 2,00,000 in this FY. I have taken possession of my house.

3. Certificate from agency mentions the 2 values of interest.

4. How do I take the max permissible tax benefit and what exactly is the ruling on this. My impression was I will get a benefit of rebate on 1,50,000 plus 1/5th of the pre-emi interest.  

5 replies on this article “Pre EMI interest and Interest on EMI – Tax benefits”

  1. Dear Rajeev, in this case the maximum interest benefit to you is limited to 1.5L Rs. only. is it your first property or 2nd property?



  2. Dear Rajeev, the property in question is on rent or self occupied?



    1. Rajeev Chugh says:

      Dear Ashal, the property has been taken over recently and is vacant (self occupied). Please guide. Thanks

  3. angan chandra says:

    for under construction property you can not claim home loan interest benefit till you get the possession of the flat. The interest portion will get accumulated & will be able to claim after possession only on 1/5 th of amount in each year but the total loan interest amount shouldn’t be more than Rs.1.5 lakhs per year. So it is not 1.5 lakhs plus 1/5 th amount, total amount to be claimed is 1.5 lakhs including pre emi interest.

    1. Rajeev Chugh says:

      Thanks Angan, there has been a mixed response but the majority have the same to say.

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