Income TAx benefit on Home loan interest
I booked a flat in 2009 and the original agreement to complete the project was in 24 months from the date of plan saction + 6 months grace period. Subsequently they changed the clause that it will be 2 years from the date of execution of builder buyer agreement +6 month grace period. I have paid 85% of the unit value so far (as it was under construction linked plan). I paid Rs.9 lacs (35% of the initial funding ) from my own source and then took home loan in 2010. Now the project is delayed and expected to complete by March, 2017. There is penalty clause and the builder has to pay Rs.5 per square feet for the delayed period.
My question here is that, as i have been paying interest on home loan from 2010 and it would be almost 7 years by the time i get possession, claiming of full tax benefit of Interest is allowed if the possession is offered within 3 years, what is the best option available for me for tax benefit. If in case i take the possession and if it remains non-self occupied and the rent fetched is not so good amount, can i take full tax benefit (net of Rental income).
I read some tax laws in the internet and on IT Dept web site, but not really able to make it to the point.
can any one clarify this doubt?