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Thank you for writing in to us. Below is the answer to your query


I’ve taken house loan in 2009. The apartment is still under construction. Yearly interest portion of my EMI is 1.1 lac and principal payment is approx. 35000. I want to know-
1) Am i eligible for exemption on interest?
2) Which income tax return form should i fill?
3) If eligible, Where should i mention the rebate on interest in income tax return form?


Dear Sidharth,

As per income tax guidelines you cannot claim Tax exemption on house which is under construction .You may be wondering then how to claim the tax exemption, here the pre-EMI term comes into the play. The real loan repayment will start only when the entire loan amount is disbursed to the builders.

1. You can use the home loans for tax savings only when the construction is completed. In this case, pre-EMI is paid while the house is under construction. So, you cannot use the pre-EMI as the tax deduction source. Once the construction is completed, the total pre-EMI interest paid is shown in the five equal installments in the subsequent years

2. You need to file ITR-1 form


For example, if you have paid Rs.100000 as the pre-EMI, then Rs.20000 will be shown in the next five years as tax deduction. Note that pre-EMI is only the interest paid during the period. If you have paid any principal amount, that is not eligible for the tax deduction. That is lost for ever.



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