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deduction under section 24

N.Sivaraj (Manager _ F&A) (93 Points)

02 April 2010

very urgent pls.

i have taken a housing loan from HDFC. as per HDFC interest certificate the pre construction period interest is from jun 09 to oct 09. nov 09 onwards interest is coming under EMI. Can i claim the entire interest for the period jun to oct as current year interest without taking 1/5th of the interest. Because the pre construction interest paid duirng the year of completion can be claimed fully in the year of completion of construction as current year interest expenses.

pls explain.

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9 Replies

Puneet (learner) (105 Points)
Replied 02 April 2010

Friend N.Sivaraj

the interest is paid for pre contruction so u/s 24 of income tax act you are liable to claim deduction of 1/5 th interest paid . and after construction completed you can claim intrest 150000 or interest paid whichever is less.

nilesh dube (Service ) (74 Points)
Replied 02 April 2010

Yes you are right Mr N sivaraj. You can claim the entire interest during the period 2009-10 if the construction is completed during this period. As per the provisions of the Income Tax Act it will not be treated as pre - contruction period interest.

CA Devender Chauhan (Group Financial Accountant) (1526 Points)
Replied 02 April 2010

Originally posted by : nilesh dube
	Yes you are right Mr N sivaraj. You can claim the entire interest during the period 2009-10 if the construction is completed during this period. As per the provisions of the Income Tax Act it will not be treated as pre - contruction period interest.

ya agree

manoj (student) (5205 Points)
Replied 02 April 2010

no dear u cant claim this as pre construction u/s 24 becoz it is avaiable for preceding previous year means upto 31 03

09 in u r case

but as u have taken this loan from hdfc a recongnized financial inst den u can claim this u/s 80c

SUNIL GARG (CHARTERED ACCOUNTANT) (175 Points)
Replied 02 April 2010

Hi Sivaraj Ji,

Yes. You can claim the entire interest because the pre-construction period ends on the date of end of the F.Y. immediately preceeding the financial year in which the construction is completed.

So, in your case, you claim the entire interest in the same year.

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 03 April 2010

Interest on Loans-sec24(b)

Interest relating to the year of completion of construction cn be fully claimed in that year irrespective of the date of completion and interest accrued during construction preceeding the year of completion of construction is accumulated and claimed as 5 equal instalments.so in your case you can claim the entire interest in the same financial year

CA Anshu Agarwal (B€ @LW@¥$ ]-[@Pp¥) (1832 Points)
Replied 03 April 2010

pre-construction interest for the purpose of section 24(b), shall be interest from the date of borrowing to the 31^st March immediate preceding the date of completion of construction.

in ur case date of borrowing is in june-09, so pre-constuction interest should start from this date, and should end on the 31st march immediate preceding the date of completion of constuction.

construction is completed in oct-09, so pre-construction interest should be count upto 31-03-2009,......

s.sssssssssss...., but loan was not existed on this date, hence no pre-constrution interest.

Entire interest during the year 2009-10, is liable to deduction u/s 24(b).