16 June 2012
I receive income from rented property and that property is taken on Loan. My query is the interest amount before taking the possession can be taken up to 5 years because there is no limit of exemption of interest amount.
Explanation.—Where the property has been acquired or constructed with borrowed capital, the interest, if any, payable on such capital borrowed for the period prior to the previous year in which the property has been acquired or constructed, as reduced by any part thereof allowed as deduction under any other provision of this Act, shall be deducted under this clause in equal instalments for the said previous year and for each of the four immediately succeeding previous years:]
Therefore, There is no limit of deduction of interest on let out property. The interest accrued prior to the period of purchase or construction can be claimed in 5 years begining from the year of completion or possession.
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