27 July 2013
If Loan is taken for the purchase of under construction house and the possession of same will be available after 3 years. The House is not constructed by us but by the builder who will give possession after the completion. But the repayment of loan will start from today itself only.
Then the Interest paid on such loan will be classified as Pre construction Loan period Interest or normal Interest within limit of Rs. 1,50,000?
27 July 2013
Money may be borrowed prior to the acquisition or construction of the property. In such a case, interest paid/ payable before the final completion of construction or acquisition of the property will be aggregated and allowed for five successive financial years starting with the year in which the acquisition or construction is completed. in act they used word aquisition and contruction both. so it dosent mean that who is built or building house. By interpretating all this it will under pre contruction period interest.
27 July 2013
If I takes a housing loan of Rs 25,00,000 for booking a House on 1st April, 2011 and Construction of house gets completed on 28th February, 2014, then the Interest Paid for two years i.e. F.Y. 2011-12 and 2012-13 if is Rs. 3,00,000 then in which Interest it would be classified?
27 July 2013
it will fall under pre construction period interest. as i earlier said act used both words aquisition & construction in the pre contruction period interest criteria .and buying house or flat from builder is amounts as a aquisition, therefore it will fall under pre contruction/auqusition interest..
CAclubindia
