Buying a Flat Before March 31: Tax Benefits You Should Know

Every year, a wave of buyers rushes to close deals before the financial year ends. But what are the real tax benefits of buying flat before March 31, and do they apply to an under-construction home like Codename Club Class? The honest answer needs a few qualifications.

A Note on the New Income-tax Act

From 1 April 2026, the Income-tax Act, 2025 replaced the Income-tax Act, 1961, and many sections were renumbered. Most buyers still search for the familiar names, Section 24 and Section 80C, so we use them here. Check the current section numbers and limits with your tax adviser before you file.

Section 24 Home Loan Interest

The Section 24 home loan interest deduction has long allowed a deduction for interest paid on a loan for a self-occupied home, with a limit of ₹2 lakh a year under the old regime. For an under-construction home, interest paid before completion is not claimed straight away. It is claimed in five equal instalments from the year construction is completed.

Section 80C Principal Repayment

The Section 80C principal repayment deduction has covered repayment of the home loan principal within an overall limit of ₹1.5 lakh a year, alongside other eligible investments. It applies once the home is complete, not during construction. Stamp duty and registration charges have also been eligible within the same limit.

Old Regime vs New Regime

The new tax regime is now the default. Under it, these deductions are generally not available for a self-occupied home. They apply if you opt for the old regime. Run both calculations before deciding, since the lower slab rates of the new regime can outweigh the deductions.

What This Means for an Under-Construction Home

Club Class is at the pre-launch stage, with possession targeted for 2029. So buying before March 31 does not unlock immediate interest or principal deductions. Interest paid during construction builds up a pre-construction claim for later, and the principal deduction starts after completion.

Why the Year-End Still Matters

• Planning: knowing your likely EMI and the year your deductions start helps you plan the next few years of tax.

• Pre-construction interest: every year of interest paid adds to the amount you can claim later in five instalments.

• Paperwork: year-end is a good time to gather loan statements and payment receipts.

Joint Ownership

If you buy jointly and both co-owners are co-borrowers, each can claim within their own limits, subject to the regime each chooses. For families with two earning members, that can double the benefit.

Questions to Ask Your Tax Adviser

• Which regime gives me the lower tax, with and without the home loan?

• What are the current section numbers and limits under the new Act?

• How much pre-construction interest will I be able to claim, and from when?

• Can both co-owners claim, and how should we split the loan?

The Bottom Line

The tax benefits of buying flat before March 31 are real for completed homes, but for an under-construction home they mostly arrive later. Buy for the home and the price, and treat tax as a bonus. Read about the Codename Club Class payment plan, and see unit prices on our price page. This is general information, not tax advice.

Related reading: the Codename Club Class payment plan and what the Union Budget means for home buyers.

FAQs

1. Can I claim home loan interest during construction?
   Not straight away. Interest paid before completion is claimed in five equal instalments from the year construction is completed.

2. Are these deductions available under the new regime?
   For a self-occupied home, they are generally available only under the old regime.

3. Have the section numbers changed?
   Yes. The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026 and renumbered many sections. Check current numbers with a tax adviser.

4. When is Club Class possession?
   It is targeted for 2029, 36 months from RERA approval.