I have one doubt abt the treatment of commercial loan. My friend taken a commercial loan for constructing his commercial building. He get an rental income from that building, my doubt is whether that loan can be treated in total income like housing loan....
I tell him that this commercial loan was not deductible but he was not agree with me.
28 July 2008
An exemption on account of interest paid on money borrowed for constructing or acquiring the house property is available u/s 24 of IT Act. However, the exemption will not be available if the loan is taken for a purpose other than to acquire the property. Also, to claim a deduction u/s 80C the repayment should be towards housing loan and that too for a residential house. Repayment of a loan taken foe a coomercial property is not covered u/s 80C.
31 July 2008
Sir i have further more doubt about the loan regarding commercial. ie not relating house property he is constructing the building and given for rental (commercial purpose). In this case we can claim interest and principal ? What was the treatment of Commercial loan for a propreitory business. Pls suggest?
CAclubindia
