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Claiming interest on loss on let-out property

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Reddy

engineer

25 Points Joined February 2012

Dear Sir,
I have purchased an apartment and I have let-out that property. I have taken a bank loan to purchase the property, however i have registered the property for 10 lacs, however i have taken bank loan for 30 lacs. I have let-out the property and I am claiming loss-on-letout property for the interest for the complete 30 lacs loan i have taken. Now the tax officer is not allowing me to take the benefit of the complete loan and is asking me to take the interest only for the registered value of 10 lacs.
What can i do in this situation, let me know what options i have. Was I aware of these things i would not have registered for a lesser value.

Thanks in advance

Replies (1)

Regit

CA.Final

320 Points Joined March 2011

The Assessing Officer's contention is correct. According to Section 24(b), Deduction on Interest will be allowed only to that extent of the utilisation of the borrowed amount for construction. Moreover if you have already claimed deduction, the excess claimed will be withdrawn by reassessment under section 147.

This is just my opinion.