Home loan for under-construction property: Will I get income tax benefits?

livemint.com:

I wish to obtain a home loan for booking an under-construction property. Can you please guide me on how to go about it? When would I be able to get the tax benefits for the home loan for an under-construction property?

The first and most important thing you should ensure is that the project is approved by some of the big lenders like ICICI, HDFC, or SBI before you decide to go for that particular project. This will ensure that prime facie technical due diligence has been carried out by their team of competent persons which is not so possible for an individual to carry out economically.

Please note that the technical due diligence does not ensure that there will not be any delay in the completion of the project beyond the time limit promised. Under no circumstance you should make full payment for the property even if the developer is offering you a huge discount on the purchase price. The payment should be made based on the progress of the completion of construction. 

The lenders would normally not agree to the full disbursement of the home loan at the beginning and would disburse the loan amount which is linked with the progress of construction. It is always advisable to go for a construction-linked plan for the property to ensure that your exposure is in proportion to the stage of completion of the property rather than disproportionate.

For a home loan taken for under-construction properties, the bank will charge you interest on every disbursement made to the builder till regular EMIs start. This interest is called Pre EMI. Pre-EMI is the simple interest payable on a home loan taken for an under-construction property where the loan disbursement is linked to the stage of construction. This amount of Pre-EMI does not have