Can you claim 80C deduction on under construction property?

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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2 Responses to Can you claim 80C deduction on under construction property?

  1. arun January 8, 2015 at 8:50 pm #

    1.completion of construction is not relevant in respect of deduction u/s 80c.
    2. But in case of interest deduction u/s 24 ,completion of construction is mandatory.

    • cleartax-team January 13, 2015 at 11:55 am #

      Please note Section 80C in the relevant section for principal repayment states ”for a residential house property the income from which is chargeable under the head Income from House Property…..and so on”

      And since under construction house property is not chargeable to tax under the head Income from House Property – therefore section 80C benefit of principal repayment is not available.