When Does The Pre-Construction Period End:?

When Does The Pre-Construction Period End:
Example to understand how to claim pre-construction interest. –

Prakash took a loan of Rs.20 lakhs to start construction of his house property in Bhubaneshwar in July 2018. He has been paying EMI of Rs.30,000 ever since.The construction was completed in August 2020 and he received a completion certificate. This house has been on rent since September 2020. Prakash is not sure how he can claim a deduction on interest for the home loan in his income tax return,Homeowners can claim the deduction on interest for the home loan only from the year in which the construction of the property is completed. In this case, Prakash can claim it from FY 2020-21.Prakash pays a total EMI of Rs.6,30,000 in total from July 2018 till 31 March 2020. For the FY 2018-19, total EMI payments are Rs.30,000 X 9= 2,70,000, of which Rs 1,80,000 is paid towards principal repayment and Rs 90,000 is paid towards interest. For the FY 2019-20, Rs 2,40,000 goes towards principal repayment and Rs 1,20,000 is paid towards interest. For FY 2020-21, Rs 1,68,000 is paid towards principal repayment and Rs 72,000 is paid towards interest.

In short:

Particulars FY 2018-19 FY 2019-20 FY 2020-21
Principal repayment 1,80,000 2,40,000 1,68,000
Interest repayment 90,000 1,20,000 72,000
Total 2,70,000 3,60,000 2,40,000

Let’s start with his EMI payments for FY 2020-21: Total interest on home loan is Rs 72,000 for FY 2020-21. Since the property is rented out, he can claim the entire interest as a deduction. Also, prakash can claim a deduction for principal repayment of Rs 1,50,000 (Rs 1,68,000 or Rs 1,50,000, whichever is less) under Section 80C from FY 2020-21.

The period from borrowing money until 31 March immediately preceding the year of completion of construction of the house is called the pre-construction period.The pre-construction interest deduction is allowed for interest payments made from the date of borrowing till March 31st before the financial year in which the construction is completed. Total interest on home loan: Rs 90,000 for FY 2018-19 and Rs 1,20,000 for FY 2019-20, totaling to Rs 2,10,000. Rs 2,10,000 is the pre-construction interest that can be claimed in five equal installments of Rs.42,000 starting from FY 2020-21.

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So Prakash can claim Rs.72,000 (interest of FY 2020-21) + Rs.42,000 = Rs.1,14,000 as deduction towards interest from home loan in FY 2020-21. All said and done, one needs to bear in mind that :

The loss from house property that can be set off against other heads of income has been restricted to Rs 2,00,000the benefit of claiming Rs 2 lakhs will get reduced to Rs.30,000 if property is not acquired or construction is incomplete within 5 years from the end of the financial year in which the home loan is availed.

What is the pre construction phase of construction?

If you have an idea for a construction project, you are probably curious about how to turn that idea into a reality. Construction projects vary in size, scope, complexity, and their desired outcome. However, nearly all construction projects follow the same process from idea to completion.

Understanding more about this process can inform decisions about where to start with your project, who to hire along the way to give your project the best chances for success, and give you a sense of what to expect for the project as a whole. In this article, we’ll break down the construction project phases,

The construction project lifecycle phases can be broadly separated into the pre-construction phase, construction phase, and post-construction phase. Within each of these categories are a diverse series of steps that must be taken to ensure the construction project is completed.

For example, the pre-construction phase encompasses a wide range of activities, including project planning, design, permitting and entitlements, and the bidding process for contractors. As we progress through our outline of the phases of construction, keep in mind that each construction project is unique.

The length of time that certain portions of a construction project take to complete will differ depending on the needs of the project. At the same time, the complexity of the project can have a substantial impact on the duration of each phase. In many large and complex construction projects, the pre-construction phase of the project can be the most time-consuming.

  1. In some cases, securing the necessary permitting and entitlements for a project can take months or even years.
  2. Throughout the life cycle of a construction project, it is important to maintain continuity through each different phase.
  3. Doing so helps preserve the integrity of the project as a whole, while also ensuring that the project adheres to timeline and budgetary constraints.
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As we will see, construction projects require a high degree of coordination. The activities within each development phase must be coordinated between the parties involved. This highlights the importance of working with an effective, experienced project manager that is familiar with each phase of a construction project and is capable of bringing about a satisfactory conclusion.

What is the most time-consuming phase of a construction project?

If you have an idea for a construction project, you are probably curious about how to turn that idea into a reality. Construction projects vary in size, scope, complexity, and their desired outcome. However, nearly all construction projects follow the same process from idea to completion.

  1. Understanding more about this process can inform decisions about where to start with your project, who to hire along the way to give your project the best chances for success, and give you a sense of what to expect for the project as a whole.
  2. In this article, we’ll break down the construction project phases,

The construction project lifecycle phases can be broadly separated into the pre-construction phase, construction phase, and post-construction phase. Within each of these categories are a diverse series of steps that must be taken to ensure the construction project is completed.

  1. For example, the pre-construction phase encompasses a wide range of activities, including project planning, design, permitting and entitlements, and the bidding process for contractors.
  2. As we progress through our outline of the phases of construction, keep in mind that each construction project is unique.

The length of time that certain portions of a construction project take to complete will differ depending on the needs of the project. At the same time, the complexity of the project can have a substantial impact on the duration of each phase. In many large and complex construction projects, the pre-construction phase of the project can be the most time-consuming.

In some cases, securing the necessary permitting and entitlements for a project can take months or even years. Throughout the life cycle of a construction project, it is important to maintain continuity through each different phase. Doing so helps preserve the integrity of the project as a whole, while also ensuring that the project adheres to timeline and budgetary constraints.

As we will see, construction projects require a high degree of coordination. The activities within each development phase must be coordinated between the parties involved. This highlights the importance of working with an effective, experienced project manager that is familiar with each phase of a construction project and is capable of bringing about a satisfactory conclusion.

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How long does the pre-construction process take?

How long does pre-construction take? – Again, the length of the pre-construction process will depend on the scope of the project. This phase can take anywhere from two to 12 weeks. While 12 weeks may seem like a long time, it really isn’t when you consider the value the pre-construction phase adds to the project.

What is the difference between pre-construction and construction?

Construction Phase – The construction phase is what many people consider the meat of the project. While this has its merits, it is important to remember that a large part of the work required to make a project successful has been completed before any construction actually begins.