Mr. X is having a proprietary business. He has constructed a House. Further he maintains a combined balance sheet (ie. Business and Personal mixed).
He has taken a Loan from bank to build the House. Can the Interest on Loan be capitalized to the House constructed by him?
He shall also be claiming the Interest on loan u/s 24b of the Income Tax Act, 1961. Whether the above treatment is correct.
If he is claiming deduction u/s 24(b) then it means it is a revenue exp as the prinipal amount of loan is a capital exp in my view you cannot capitalise interest paid.
wait for other members to comment.
it can't be capitalized...
the total pre-const. interest is to be claimed u/s 24(b) over 5 years equally aftr the construction is over
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