I tax
This query is : Resolved
12 January 2014
Dear Friends Pl clarify how to treat the interest during construction of house if the house is completed with the same financial year of taking loan from bank. Wheather to take full interest for exemption or it should be at 1/5 each for 5 years.
12 January 2014
Dear tax payer, As per Section 24 of Income Tax Act you get full amount of interest paid or payable to borrower as deduction.
For your understanding i am giving u one small example -
Loan 100000/- int. rate 12% p.a. Loan taken on 01.04.2012 and construction started on 03.04.2012 construction completed on 05.10.2013
Interest paid during FY 12-13 is 12000 and during FY 13-14 is also 12000 (assume)
Then interst allowed in IT return for the AY 1$-15 is as follows :
Pre-construction interest (12000/5 FY 12-13) 2400.00 and
General interest on housing loan 12000
Total interest allowed U/s. 24 for the asst. year 14-15 is 14400/- (i.e. 12000+2400) as calculated above.
For your understanding i am giving u one small example -
Loan 100000/- int. rate 12% p.a. Loan taken on 01.04.2012 and construction started on 03.04.2012 construction completed on 05.10.2013
Interest paid during FY 12-13 is 12000 and during FY 13-14 is also 12000 (assume)
Then interst allowed in IT return for the AY 1$-15 is as follows :
Pre-construction interest (12000/5 FY 12-13) 2400.00 and
General interest on housing loan 12000
Total interest allowed U/s. 24 for the asst. year 14-15 is 14400/- (i.e. 12000+2400) as calculated above.
12 January 2014
Preconstruction period ends with the prior March from the year of construction/acquisition completed, since your case same year construction completed, preconstruction interest is Nil. you can take normal deduction u/s.24b
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