House Property Income

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bala (Querist)

14 July 2008 I have got allotment of a flat in a House Building Co-operative Society.I havn't got the possession as yet .Can I claim the amount paid as instalment to the society as deduction u/s 80C. What if the sum paid before allotment. Can anyone quote the facts of any decided case law in this respect?

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

14 July 2008 Repayment of Principal Amount is deductible u/s 80C upto the max limit of Rs. 100000/-. Also, the interest paid on House Loan prior to construction or possession shall be accumulated and 1/5th of this and balance in equal instalments in the next 4 succeeding years will be claimed as deduction u/s 24 alongwith the intt for the year itself.

bala

bala (Querist)

15 July 2008 What if we have no bifurcation of interest & principal amount in the instalment due ? Can we claim the instalment paid as a deductible amount u/s 80C before being given the possession of the flat?

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

15 July 2008 No, Intt is deductible under section 24 while Repayment is deductible u/s 80C seperately. The breakup of payments into principal and interest is necessary. A certficate is issued by every H.Loan provider for Income Tax purpose which gives the requisite break up. Also, the Assessing Officer may ask for such a certificate to verify the authenticity of claims of deductions under both the sections. As such it is always advisable that such a certificate should be obtained.

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