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Deduction under section 24

01 July 2013

An HUF has rented out its property. Now it wants to rennovate the property. What is the limit of deduction under sec.24 which it can claim?Whether still it is Rs.150000/-.

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4 Replies

DIBYENDU (SERVICE) (266 Points)
Replied 01 July 2013

If he rented out his property then there is no limit to claim u/s 24

CA Parul Saxena (CA) (8426 Points)
Replied 01 July 2013

Whether it is not limited to 30% of the Annual Value of the property.?

CA Ramsai N (Fresher) (594 Points)
Replied 01 July 2013

When Property is in the occupation of the owner and not let-out during any part of the previous year, the Annual Value will be taken as NIL.

# When more than one house is held by the owner and is in the occupation of the Owner for his residential purpose, then only one residence value, at Owner’s choice, will be taken as NIL. For other House/s, the tax is computed as though the Property is Let-Out.

# When the Annual Value is taken as NIL, no deduction u/s 24 is allowed except...
in respect of interest paid on capital borrowed for acquisition/construction and the same is completed within 3 years from the end of financial year in which the loan was borrowed subject to a maximum of Rs. 1,50,000 p.a..

# Deduction in respect of Interest on housing loan during the period of construction is allowed in equal installment over a period of 5 years commencing from the year of completion. However, this will be within the overall limit u/s 24(b) of the Act.

# There is no limit for the interest on borrowed loan in respect of Let- Out Property.

# If there is a “Loss from House Property” , the same can be set-off against income from any other head in the same
Assessment Year.

# If the Loss cannot be set-off against income from any other head in the same Assessment Year, the Loss is allowed to be carried forward and set-off in 8 subsequent Assessment Years against income from House Property only.

Jayesh Kumar (Trader) (21 Points)
Replied 18 July 2014

Hi,

I have a question with regards to deduction on account of Loan for consturction of residential property.

I booked a flat with a builder in Thane district in Oct-2009. Loan for the same was disbursed in Mar-10, the property was constructed in Jun-14. (OC is still awaited).

I understand, in case of self occupied property the construction has to be completed within 3 years for claiming 2lacs else it would be 30K.

My quesitons are:

1) Is the same restriction applies for let-out property as well (Construction within 3 years)?

2) How is pre construciton period interest accounted for in case of construction period more than 3 years and property is self-occupied vs let out?

3) For completion of construction date, do we have to wait for the OC or that is not required?

4) If one has claimed LTCG expemtion for acquisition of this property, would the benefits be denied since the construction period is more than 3 yrs?

Please help.

Regards,