query about Pre Construction Period Intt. u/s 24 of Income T
This query is : Resolved
28 February 2009
Sir,
I have an query about Pre Construction Period Intt. u/s 24 of Income Tax Act :
Case : Suppose Mr. A buy a residential plot & start construction of house by taking loan from bank. Now, after the completion of construction, he has to avail the tax benefit of pre construction period interest in 5 equal instalments. For the first year, he availed the benefit of pre construction intt. (1/5 share).
Thereafter , he sold the same property.
Now, the question is What to do with balance four instalments of pre construction period interest???
Whether he can take benefit u/s 24 as usual without having ownership of that house?
or
he should consider as the cost of that property for calculating capital gain/loss.
Kindly Advise with provisions of the Act & case laws.
Thanks & Regards,
I have an query about Pre Construction Period Intt. u/s 24 of Income Tax Act :
Case : Suppose Mr. A buy a residential plot & start construction of house by taking loan from bank. Now, after the completion of construction, he has to avail the tax benefit of pre construction period interest in 5 equal instalments. For the first year, he availed the benefit of pre construction intt. (1/5 share).
Thereafter , he sold the same property.
Now, the question is What to do with balance four instalments of pre construction period interest???
Whether he can take benefit u/s 24 as usual without having ownership of that house?
or
he should consider as the cost of that property for calculating capital gain/loss.
Kindly Advise with provisions of the Act & case laws.
Thanks & Regards,
CA PRAMOD SARAOGI
(Expert)
01 March 2009
In my view , the balance four installments should be added to the cost of acquisition of the property and should be deducted from the Sale Consideration.
CA Nitin Wadhwani
(Expert)
01 March 2009
Yes.
I also agree with mr.Pramod.
I also agree with mr.Pramod.
02 March 2009
i agree with the above answers.
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