News & Media 1st May 2026
Our Partner, Rahul Charkha shares his insight in Outlook Money, “Why Pre-Construction Interest Matters For Tax Savings.”
He highlights that such pre-construction interest can be claimed as a deduction in five equal annual instalments, starting from the tax year in which the property is acquired or constructed. If homebuyers do not maintain a clear record of this pre-construction interest, they may risk foregoing a legitimate deduction that could otherwise reduce their tax outflow over several years. The ability to claim pre-construction interest is determined by the strength of one’s paperwork. Section 22 allows a deduction for pre-construction interest, but the higher Rs 2 lakh cap for self-occupied property is available only if the property is completed within five years from the end of the tax year in which the loan was taken, and the assessee furnishes a certificate from the lender specifying the interest payable.
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