I HAD PURCHASED A builder FLAT LAT 2 YEAR BEFORE & took the bank loan 85% of total cost  & paid to the builder. The flat is under construction now it is completed can i claim the intt. deduction u/s 24  in income tax return. i had not taken the position. Registry is due.      offer of position is given by the builder. 

Research Analyst

Dear Sachin,


First of all your question is not that clear.. still i would like to help with what i understand from your query.

Sec 24(b) would allow deduction of interest paid only when the structure becomes a Residential House Property and not before that. You can claim deduction under Sec 24 only when you have something taxable from the HP in question.

Few things---

1) The comletion has taken place in PY 2010-11.-----------So there will be no implication of any income or deduction in the P.Y 2009-10 for which you would b filing the return

2) The house is not yet possessed.----- This point is not that relevant to this case

3) Registry is Pending.--------- In IT Act, registered ownership of property is not to be seen at most places it is the beneficial ownership that should be seen.


According to my understanding he want to say that costruction of the flat is completed. He neither have the possession of the flat nor the registry. He has taken the loan for the same property @ 85%. Can he get deduction u/s 24(b)??

1. As per Section 27 you will be considered Deemed Owner of the property.

2. As the construction is completed with in 3 years from the end of the financial year in which loan taken then deduction for interest will be allowed upto Rs. 1,50,000. (Accrual Basis)

3. Deduction on interest for prior period will also be allowed in 5 years equal installment. (Accrual Basis)

4. Deduction for principal amount repaid will be allowed u/s 80C. (Paid basis)

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as per my Openion he want to say that can he take deduction of pre period in 5 installment



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