Claiming interest paid before construction was completed

Interest paid before the year of completion is claimed in five equal parts, starting from the year construction is completed. It is in addition to the current year's interest, but within the overall limit for self-occupied houses. Principal before possession is not deductible.

If pre-construction interest totalled ₹3,00,000 and you got possession in FY 2025-26, you claim ₹60,000 a year for five years from that year under Sec 24(b) (now Sec 22(1)(b)). For a self-occupied house, current interest plus ₹60,000 together cannot exceed ₹2,00,000 under the old regime. For a let out house there is no cap. Keep the bank's statement showing interest by year.