House property

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pankaj patel (Querist)
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05 July 2013 I AM STAYING IN MY OWNED HOUSE PROPERTY AND NOW I HAD PURCHASED A NEW FLAT WHICH IS UNDER CONSTRUCTION AND ALSO AVAILED A HOME LOAN ON IT. CAN I CLAIM INTEREST & PRINCIPLE DEDUCTIONS FROM MY SALARY INCOME ?

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CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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05 July 2013 YES YOU CAN CLAIM INTEREST UNDER SEC 24 and Principle under Sec 80C

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Ganeshbabu K

Ganeshbabu K (Expert)
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06 July 2013 As of now, you are not eligible for any tax benefit on such loan repayments.

****refer second proviso and explanation provided in section 24(b).

1) According to the Income-tax Act, 1961, where the property has been acquired or constructed with borrowed capital, the interest payable on such capital for the period prior to the year in which the property has been acquired shall be allowed as deduction in five equal instalments beginning from the year in which the property is acquired.

2)Thus, the interest included in the loan instalment paid by you during the construction period shall be eligible for deduction from the year in which the flat is acquired/construction is completed.

3)The principal amount of the loan repaid till date shall not be available as a deduction under section 80C till the time the construction of the flat gets completed.

4)Once the flat is completed and the possession is handed over to you, you will be eligible to claim deduction for interest paid on the loan under section 24(b) and principal amount of loan under section 80C.

Thanks & regards
Ganesh babu k

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