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Deduction u/s 80c - repayment of principal amount

Devendra (Chartered Accountant) (4775 Points)

23 April 2012

Mr. X borrowed a loan from bank for the purchase of Residential Flat, he is paying the Principal Amount every month (EMI), but the Residential Flat is not yet in his possession. Will he still be eligible for the deduction u/s 80C for the repayment of Principal Amount even if the flat is not in his possession?

Regards,

Devendra Kulkarni

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Arvind Sharma (ACA) (1432 Points)
Replied 24 April 2012

No deduction will be allowed.

The deduction is permissible, if there is income from such house taxable under the House Property Head.

The provision in this regards is as below:-

80C(2)(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” ........

Link to provision:-

https://law.incometaxindia.gov.in/DIT/File_opener.aspx?page=ITAC&schT=&csId=5cc58b11-ea04-4050-88b4-70686201a409&rdb=sec&yr=e5be6bdb-1fc4-42d6-ac7b-34a44fd65485&sec=80c&sch=&title=Taxmann%20-%20Direct%20Tax%20Laws