Tax Implications of Pre-EMI for Under Construction Properties
When buying an under construction home, developers often seek payment on the basis of the stages of construction completed. Catering to such requirements, Home Finance Companies (HFC) facilitate partial disbursements of the sanctioned loan periodically, in tune with the developers’ demands. For these partial loan disbursements, a borrower would be required to pay what is called as a “Pre-EMI”.
Pre-EMI’s are very different from regular EMIs in composition and tax treatment. A basic understanding of their working is thus essential for effective loan