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I took a home loan in August 2005 and my complete disbursement was made on the fact that 85% of the house construction is complete.
However, the MSEB power connection has not come. Hence, the builder has not given the possession of the flat.
Can I get the income tax benefit for the last financial year in this case?
Also, in this case can I get the benefit on my stamp duty & registration?
- Ravi Mehendale
The deduction for the year ended March 31, 2006, depends on whether the construction of the house property is completed before March 31, 2006.
If yes, you can claim deduction in this year itself. If it is not complete, you get no deduction this year.
Your property will not qualify as a 'house property' in the year ended March 31, 2006 since it is not complete. So you will not be eligible for any tax relief for that year.
Deduction under Section 80C is available for stamp duty and registration charges paid in the financial year (in your case April 1, 2005 to March 31, 2006) only if the construction of the property is completed by March 31, 2006. Else, this deduction will be lost forever.
Hence, the stamp duty and registration charges paid will not qualify for deduction under Section 80C.
Also, any principal paid before March 31, 2006 will not be eligible for any tax benefits in that year or any subsequent year and is lost forever.
As far as the interest payable till March 31, 2006, is concerned, it will be allowed as a deduction in the five subsequent years in equal installments. Of course, I am assuming the property will be completed by March 31, 2007.
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