Interest on housing loan

This query is : Resolved

CA. Amit G. Chandani (Querist)
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17 April 2012 Mr. X is owner of a double-storied house. The ground floor is rented to one of the commercial establishment @ Rs. 50,000 p.m., while the first floor is occupied for his own residential purpose. The house is constructed partly with housing loan & partly with own funds. Interest on housing loan is Rs. 4,00,000 p.a. Although major portion of housing loan (app. 80%) is used for construction of the first floor, i.e. self occupied portion.

Mr. X claims interest deduction of Rs. 1,50,000 [maximum u/s 24(b)] related to first floor, i.e. self occupied portion & Rs. 80,000 being proportionate interest on 20% loan used for construction of the ground floor.

Is there any other way to claim full interest deduction of Rs. 4,00,000?

CA Kishore Tallam

CA Kishore Tallam (Expert)
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17 April 2012 If Mr. X has been claiming the same from last few years, then it is not advisable to change the stand since it will create unnecessary complications.
However, if u want to claim total interest as deductions, then ask him to show that 1st floor also as let out and then he can claim the total interest there by he can save tax.

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