Deduction of interest under house property

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What is treatment of principal paid on housing loan  under construction period.

After completion of construction would deduction for this principal amount will be available or not????

Replies (4)

I think u cannt claim the principal amount for prior period,but for the repayment in the previous year u can claim  u/s 80c up to one lakh per year and the interst paid in prior perod is allowed as deduction u/s-24 for the year in which it is completed and four consuctive  years

PROVISIONS OF SEC 80C ... PORTION RELATES TO HOUSING LOAN 

(xviii) for the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head 'Income from house property' (or which would, if it had not been used for the assessees own residence, have been chargeable to tax under that head),

 

As the Property has not been Completed at the end of the Year, the Income is Not chargeable Under House Property and Hence, the Principal Portion is not eligible for Deduction under Sec. 80C

@ D.RAGHAVAN, WILL U PLEASE ELOBARATE IT OR PROVIDE ANY LINK TO UNDERSTAND CLEARLY,

THANKS FOR THE REPLY SIR.

Dear Vikas

The Provisions of Section 80C, imposes certain condition which relates to Repayment of Housing Loan. First Condition is that the Income accrue or arise from the property chargesable to tax under Income From House Property.

When a Property is under Construction, No Income from that property accrues or arise at any point during the year. Since that condition is not fulfilled, the Repayment Portion of the Housing Loan in that year not eligible for Deduction u/s.80C


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