Pre- construction interest [Section 24(b)]

  • Pre- Construction Period is the period prior to the previous year in which property is acquired/construction is completed.
  • Pre-construction period is the period commencing from the date of borrowing of loan and ends on earlier of the following:
    • Date of repayment of loan; or
    • 31st March immediately prior to the date of completion of the construction/acquisition of the property.
  • Interest pertaining to pre-construction period is allowed as deduction in 5 equal annual instalments, commencing from the year in which the house property is acquired or constructed.


Mr. X took loan of Rs.10, 00,000 on 1-10-2017. Interest was payable @10% p.a. The Construction was completed on 30-06-2018. Compute the Pre-Construction Interest allowable u/s 24(b).

  • Pre – Construction Period is from 1-10-2017 to 31-03-2018.
  • Pre – Construction interest = 10,00,000*10%*6/12 = 50,000

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