I have borrowed housing loan in year 2007. The possession of the flat will be in next year June 2008. My question is can I avail tax benefit on this loan for the year 2007-08 tax calculation. The amout disbursed to the builder is a part payment not full. I have asked bank to deduct full installment from my salary even though the full loan is not disbursed to the builder.

Interest payments on construction loans used to built a primary home ARE deductible as mortgage interest, provided they exceed the $5,300 standard deduction for 2007.