India, Dec. 21 -- Surat-based Amit Rastogi booked an under-construction flat for Rs.85 lakh. The developer levied GST at 5% on each installment, increasing the overall cost of the property. Since the value exceeded Rs.50 lakh, Amit was also required to deduct 1% TDS on every payment and deposit it using Form 26QB.

During the construction period, Amit paid pre-EMI interest, which is not eligible for an immediate tax deduction. After taking possession, the total pre-construction interest can be claimed in five equal annual instalments, subject to the Rs.2 lakh annual cap under the old tax regime.

This example highlights how the tax treatment differs when buying an under-construction property compared with purchasing a ready-to-move-in hom...