From ET Realty
As if the mental harassment of delayed delivery of a house is not bad enough, you could also be losing 85% of the tax benefit on your home loan, for no fault of yours. A tax deduction of Rs 2 lakh per year is allowed against payment of interest on home loans, if the house is acquired within three years of taking the loan. In case the possession happens after three years, the permissible deduction falls to just Rs 30,000 a year – a reduction of 85%.
In the past couple of years most home deliveries have been delayed beyond three years from time of purchase, making the buyers ineligible for the tax deduction- a fact they would have not known at the time of taking the home loan.