Devendra (Chartered Accountant) (4775 Points)
25 July 2013Mr. 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.
CS,CA F,Numrologi TusharSampat
(CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert)
(85930 Points)
Replied 25 July 2013
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.
Ayushi Agarwal
(Article)
(161 Points)
Replied 25 July 2013
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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