India, Nov. 22 -- Mumbai-based Rahul Saraf purchased a home in March 2024 with a home loan of Rs.50 lakh and he is living in it. The total pre-construction interest paid was Rs.5 lakh. According to Section 24(b), Rahul must claim it in five equal installments of Rs.1 lakh each over five years, starting from possession. In the first year, his regular annual interest was Rs.1.5 lakh. Since the combined limit is Rs.2 lakh, only Rs.0.5 lakh of pre-construction interest can be claimed. '

Pre-construction interest refers to the interest paid from the date a home loan is disbursed until March 31 of the year preceding the year in which construction is completed or possession is received.

"The Income Tax Act does not allow this entire amount to ...