Preconstruction Principle & Interest

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vikrant (Querist)
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05 January 2010 Sir /Madam

Please help me for the following two queries
1 ) Am i able to get exemption for the principle amount which i used for the construction ( a) for preconstruction ( b ) and after construction completes

2 ) Am i able to get exemption for interest on that capital which i borrowed for the construcion For preconstruction i guess u/s 24 ( b )it' s possible but i am not sure plz clarify

Sudhindra

Sudhindra (Expert)
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06 January 2010 First of all there are two concepts here whether ur talking from the point of view of capital gains or the normal deduction ? Pls clarify.

If it relates to capital gains then surely if it is within the specified period as mentioned under section 45 to 55 opf the income tax act then pre-construction cost will be allowed subjec to the limit laid down under the relevent section.

Secondly if it pertains to business deduction then preconstruction cost of borrowed funds needs to be capitalised, and post will be allowed as a revenue deduction...

Should u require any further clarification pls write to ...

Sudhindra

Sudhindra (Expert)
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vikrant

vikrant (Querist)
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06 January 2010 Dear Sir
Thanks for your reply, but please clarify me , for principle amount ( loan taken for residenital purpose ) will be allowed as deduction , for both after & pre incorporation amount

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