Principal Repayments are allowed as a deduction from your Total Income under Section 80C of the Income Tax Act. But can you claim Section 80C deduction for principal repayment when your property is under construction?
The benefit of claiming principal repayments under section 80C is tied to Ownership.
Until the construction of the property is complete and you have the registration and ownership documents – you will not be able to claim for this deduction. You can claim entire principal repayment done in a year, under section 80C, in the year in which your ownership is established.
Suppose construction of your property is completed on 28th February 2015, you can claim your entire principal repayment of the financial year 2014-15 in your Income Tax Return you file for that year.
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