Interpretation Issue on Interest on loan for H/P

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This query is : Resolved

CA. Lohith Jagadeesh (Querist)

24 February 2011 Hi All,

Understanding the provisions of Interest on Loan under Self occupied Property (SOP), the Limits for NEW LOAN { Loan take after 1/04/99 }, the maximum limit is 1.5 lacs for the purpose of Construction or Purchase.

Further under Sec 80 C it says among other things that No deduction can be claimed under this Section for which any claim under Section 24 was allowed.

Now Assuming Interest on Loan for the Above case was Rs 2.3 Lacs,
Rs.1.5 lacs would have been claimed under Section 24, but the balance of Rs.80K can it be claimed under Section 80 C { assuming that the limit of Rs. 1 lac is still available, meaning no other deductions like PF, LIC etc}

Thank you

Regards
CA.Lohith.J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITF Hons

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)

24 February 2011 Interst paid on housing loan is allowable u/s 80C of the IT Act. It is only allowable u/s 24(b) of the Income Tax Act to the extent of maximum Rs. 1.50 lacs.

Therefor you cannot claim balance of Rs. 80000/ under section 80c or any other section.

Principal compotent in instalment paid for housing loan is allowable u/s 80C of the IT ACT

Ashok Asthana

Ashok Asthana (Expert)

24 February 2011 Comment of Sunil Kr. First two lines need clarifications. Interest paid can not be allowable both under 80C and 24b

Juhi

Juhi (Expert)

24 February 2011 Well first make sure that property in complete since interest deduction under pre-construction period is not allowed as deduction till completion of property.

Further if you are paying interest, then some component of principal would also be repaid. This repaid principal shall be allowed as deduction. Further the stamp duty, Registration charges paid shall also qualify for Sec 80 C

SANDEEP AGGARWAL

SANDEEP AGGARWAL (Expert)

24 February 2011 Section 80-C is for principal repayment and 24(b)is available for interest repayment. Both are different and bank always provide a certificate giving bifurcation between principle and interest.

Regards,

Sandeep Aggarwal

CA. Lohith Jagadeesh

CA. Lohith Jagadeesh (Querist)

24 February 2011 Hi,

I perfectly understand what is given under Secion 24, but the interpretation issue is about Sec 80 C, where in it says among other things, " deduction is not allowed under Sec 80 C for an amount which was claimed under Sec 24" - Please Reffer to Sec 80 C in full.

Interpretation Option 1

If any interest is claimed under Sec 24, then it cannot be claimed under any other Section - meaning does it have a over riding effect over all the other sections of Income Tax Act 1961

Interpretation Option 2

Since Sec 80 C says that deduction under this section cannot be claimed for which any deduction under section 24 was allowed, which means, Rs.80000 was not claimed under Section 24 being Excess {over & above Rs.1.5 lacs}therefore claim it under Sec 80 C

Can it be claimed????

I also understand that Sec 80 C gives a benefit of Repayment of Housing Loan Principal amount.

Comments welcome.

Thank you

Regards
CA.Lohith.J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITF Hons

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