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Deductions On Housing Loans

Monday, October 14, 2013
By Anand Tibrewala

Anand Tibrewala is a CA and Senior Partner at the leading Chartered Accountancy firm, AD & Company

I have taken a housing loan for a property which is under construction. The bank is regularly disbursing the loan for the installments demanded by the builder. I am asked to pay interest on a monthly basis towards this loan. Regular EMI would start after the construction is completed and the flat is handed over to me. Can I claim any deduction for the interest paid by me?
—Ramkumar Taneja, Colaba
The interest paid by you on the housing loan before the regular EMI starts cannot be claimed as deduction in the same year. You need to spread this interest over a period of 5 years and then claim deduction accordingly in all 5 years.

I am a salaried employee working for a private company. During F. Y. 2010-11 I had changed my employment and my previous employer settled the PF and other dues. I received the amount after TDS deduction, but did not receive the Form 16 in respect of this transaction. I have not declared these facts in my tax return. Now I have received notice from Income Tax Department asking the reconciliation of TDS. What should be my stand?
—Bhavesh Shah, Charni Road
It is unreasonable on part of the employer for not furnishing the form 16 to you in respect of PF transaction. However, it is not correct to assume that this transaction is not to be included in your return of income since form 16 is not received by you. All income taxable or otherwise need to be declared in the return of income and exemption should be claimed separately. You will be required to furnish the reconciliation of all your income and TDS. If any additional Tax is required to be paid, then you will have to pay the same along with interest.

I am going to complete 60 years on 31.3.2014. Whether I will get the benefit of senior citizen for the financial year 2013-14?
—Arjun Kamdar, Tardeo
As per Income Tax Act, 1961 if the assesse completes 60 years any time during the previous year then he gets the benefit of senior citizen for that year. Since you are completing 60 years on the last day of the previous year you shall be eligible for the benefits of senior citizen for financial year 2013-14.

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