I purchased a house which is under construction. I availed home loan from bank and paying EMIs. There are some posts on the site but are not clear enough to me. Hence, posting the question.
My question is:
1) Can I claim the benefit of "Interest payable on borrowed capital/Loss from house property"? 2) What is Section 24 of the act? Does it say that I can claim the benefit only if the possession of the flat is received within 3 or 5 years from the end of year in which home loan was taken?
Please clarify. Any help will be greatly appreciated.
15 August 2020
Dear Mr. Mangesh Kurup Ji. Answer to your Queries are as follows: 1. Yes, you can take the benefit of interest payable on borrowed capital. But you can take the deduction only when construction is completed. Interest paid in the year prior to completion of construction will be allowed as a deduction in 5 equal yearly installments starting from the year in which construction was completed. For example, You took a loan in 2017-18 and started construction of a property and construction is completed in 2019-20. So you can start taking a deduction of Interest paid on loan only from F.Y. 2019-20 i.e. in the year of completion of construction. Henceforth the amount of deduction in 2019-20 will be the sum of i) Total interest paid in 2019-20 & ii) 1/5(Total interest paid in 2017-18 & 2018-19).
CAclubindia
