Construction company property

Dear rengarajan Sir,

I think u have mixed two thinks -

If Buliding will be given on Rent, I mean it will be assed as House Property then Interest of Preconstruction period will be allowed in 5 equal annual installments begining with the year in which construction gets completed....

However If Building is constructed for using it in Business like office, etc then Interest of preconstruction period will be capitalized & claimed in the form of Depreciation............

As far as New Direct Tax code is concerned it is not certain that it will come in to effect from 01.04.2010,

Anyways if it is made mandatory (or in the present act amendment is made to reduce the deduction to 20% from 30%) then deducton will be allowed @ 20% simple, nothing is requied to be done in this case, I mean no separate/additional treatment is required becos of change in the rate of deduction........

Dear rengarajan Sir....

Mr.Amir is once again rite.....

If Buliding is treated as House Property then Interest of Preconstruction period will be allowed in 5 equal annual installments begining with the year in which construction gets completed......

If Building is used for business purpose then Interest of preconstruction period will be capitalized & depreciation  will be claimed...

I don't know about the DTC that much.....

As Mr.Amir said.... if it is 20% and not 30% claim 20% ....

Thanks both of you.  Now it is clear if the company for its own use only it can capitalise otherwise it will be set off in 5 equal instalments. 

Coming to DTC, the construction will take place in another 2 years, then that time we will be able to adjust 20% while calucalating income from house property.

once again thanks for both of you

Best Regards

Welcome sir...