house property

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neha

neha (Querist)
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29 November 2010 can u give me the full question on pre construction period interest with answer?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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30 November 2010 This example may serve your purpose-
1.On 1.1.2009 Ram takes5.00 lac loan for construction of a residential property.
2. Construction completes today i.e. on 30.11.2010.
2.Details of Interest Accrued on loans-
A. 1.1.2009 to 31.03. 2009 15000
B. 1.4.2009 to 31.03.2010 65000
C. 1.4.2009 to 30.11.2010 45000
D. 1.12.10 to 31.3.11 15000
3. Calculation of Interest Deductible U/s 24 from House Property -
A. A Y 2009-10 and AY 2010-11
1. No Income under the head HP as construction yet not completed.
2. Interest can not be claimed in these AYs. Total accumulated Interest 15000+65000=80000/-

B. AY 2011-12
1. 1/5 th of 80000/ i.e.16000/-will be deductible in the AY 2011-12 as construction completes on today in FY 2010-11. It is Pre-construction Period Interest.
2. Interest from 1.4.2010 to 30.11.2010 of45000 and 1.12.2010 to 31.3.2011 of15000/-i.e. 45000+15000=60000 will be fully dedcutible U/s 24.
3. Hence total deduction U/s 24 will be of16000+60000=76000.

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