# Pre-Construction Period Interest (PCPI)
Interest paid on a housing loan before the property is ready cannot be claimed in those years. Instead it is accumulated and spread over 5 years once the property is completed.
## Defining the Pre-Construction Period (PCP)
> PCP = From the date of borrowing the loan → up to the END of the Financial Year immediately PRECEDING the FY in which construction is completed / property is acquired.
Note the cut-off: it ends at 31 March of the year before completion — NOT the date of completion itself.
## How PCPI is Deducted
- Interest accruing during the PCP is deductible in 5 equal annual installments (1/5th each year).
- The deduction commences from the previous year in which construction is completed / property is acquired.
- Special case: If the date of borrowing and the date of completion/acquisition fall in the SAME financial year, then PCPI = Nil (there is no preceding full year of pre-construction interest).
## Current Year Interest (CYI)
- Interest from the year of completion onwards is Current Year Interest.
- CYI is claimed fully in the respective previous year (no 5-year spread).
> Total Interest Deduction = (1/5 of PCPI) + Current Year Interest
## Memory Aid
- PCP ends at the end of the prior FY, not the completion date.
- PCPI is spread 1/5th per year for 5 years.
- Same-year borrow & completion ⇒ no PCPI.