Pre EMI Tax Exemption - Home Loan Pre-EMI Interest Tax Exemption

HOME LOAN

Check Pre-EMI Tax Benefits on Housing Loans in 2024 BASIC

What is a Pre-EMI?

• When taking a home loan for a house under construction, funds are disbursed gradually based on construction progress.

• Pre-EMIs are smaller payments covering only the interest on the disbursed portion of the loan, not the entire loan amount.

• Regular EMIs commence once the construction is complete and the full loan amount is received.

• Pre-EMIs differ from regular EMIs in that they are interim payments during construction, gradually transitioning to full

Understanding Pre-EMIs Tax Benefit Implications

• Tax relief on Pre-EMI interest is available, but not immediate; it kicks in after construction is complete.

• Total Pre-EMI interest paid during construction qualifies for deduction, spread over five years.

• Only interest component, not principal repayment, is eligible for tax benefits under Section 24.

• Repayment of principal after construction completion allows for tax deduction, capped at Rs.1 lakh annually.

Taxes During Pre-EMIs

• Tax Treatment • Deduction Eligibility

• Section 24

• No Principal Deduction