Commercial Loan

This query is : Resolved

Reeji Rakesh (Querist)
Follow

28 July 2008 Dear friends

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.

Kindly suggest the answer...? urgent........

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
Follow

28 July 2008 Income is from property and sectios relating to Property Income under the IT Act would apply.

Reeji Rakesh

Reeji Rakesh (Querist)
Follow

28 July 2008 Sir,

relating to property income under the it Act, what it says, and what was the treatment.

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
Follow

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.

CA. Dhirendra Singh

CA. Dhirendra Singh (Expert)
Follow

28 July 2008 Mr. Ramesh Ahuja is 100 % correct .

Reeji Rakesh

Reeji Rakesh (Querist)
Follow

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?

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now