Interest deduction for house property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 November 2010 1.A person has a house property in Mumbai which is currently occupied by him
2.The person has bought another house property which is under construction in a place outside Mumbai.
3.He has taken bank loan for the second property for which EMI is getting deducted.

Question:
1.How would the second property under construction be considered for income tax purposes.
2.Since the property is under construction, you cannot calculate any annual rental income for it.?
3.So, in that case, how will the interest paid for such property under construction be treated.
4.Can it be deducted under sec 24?
5.Can the principal payment be considered under Sec 80C deduction.

Thanking in advance

NITIN SHARMA

NITIN SHARMA (Expert)
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07 November 2010 That the intrest paid on such property shall be claim after the construction of such house.
yes intrest can be deducted u/s 24
yes principle can be considered u/s 80c
There is no restriction on caliming loan intrest on house property on the basis on number of property held.

Querist : Anonymous

Querist : Anonymous (Querist)

09 November 2010 thanks for the reply
as mentioned, interest can be claimed only after construction, suppose the construction is completed 2 years from now, then can the interest for 2 years be claimed in the year of completion of construction.
also, can principal payment be claimed now or does it have to wait for completion of construction.
thanks

NITIN SHARMA

NITIN SHARMA (Expert)
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10 November 2010 NO intrest shall be claimed in the 5 years. the payment of principle can be claim in the year of payment u/s 80c

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