Purchasing a home is one of the most significant financial decisions that an individual can make. It is also a significant expense, and many individuals rely on home loans to finance their purchase. One of the tax benefits of taking a home loan is the deduction of interest paid on the loan. In this blog post, we will explore the tax implications of home loan interest and the suggestions for addressing them.
Section 23 - Deduction of Interest from House Property:
As per section 23 of the Income Tax Act, pre-EMI interest is allowed for deduction in five equal instalments from the year of completion of construction. This means that while on the one hand, buyers are suffering from delays in construction, on the other hand, the interest paid by them is not allowed as a deduction.
Suggestions for Addressing the Issue:
It is suggested to remove the said hardship by allowing deduction of pre-EMI interest in the year of payment of interest under section 23. This would ensure that buyers are not unfairly taxed on interest paid during the construction phase of their home and that they are able to claim the appropriate deductions.
Purchasing a home is a significant financial decision, and many individuals rely on home loans to finance their purchase. One of the tax benefits of taking a home loan is the deduction of interest paid on the loan,