Home loan deduction

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 April 2013 I have a house property I bought in 2004 for Rs. 40 lacs with the help of a home loan of Rs. 30 lacs. In 2008, I refinanced this loan basis the market value of my property at that time through another bank, i.e. took a loan of Rs. 65 lacs against the property value of Rs. 80 lacs in 2008 and paid off the first loan. If I sell the property now, I know I can include the interest I paid on the original loan of Rs. 30 lacs under cost of acquisition while computing capital gains. Though the law is silent, to be fair the interest I include in cost of acquisition should be over and above the interest I claimed as deduction u/s 24. My question is, can I also include the interest on the second loan of Rs. 65 lacs (over & above the interest claimed u/s 24) in my cost of acquisition? If so, is there any judgement or guideline etc. supporting this? If not, will I not be understating my cost of acquisition as no interest on loan after 2008 will be included?

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)

10 June 2013 You have taken first loan and availed the benefit u/s 24 and also repaid the same. Now, you have taken the second loan the purpose has not been mentioned why you have taken the second loan if you taken the second loan for the purpose as mentioned in the provisions of section 24 then you are eligible to take deduction otherwise not. As regards sales consideration which you may get you can add the interest only when yu have not taken any benefit under IT act for the balance amount otherwise not.

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