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HOUSE PROPERTY

06 March 2010

An assessee takes a Bank loan for construction of a house property on 1.4.04. The date of starting of construction of the house is 1.6.04. The construction of the house was finished on 31.3.08. What will be preconstruction period for claiming deduction on interest on loan u/s 24(b)?

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24 Replies

CA Dhiraj Ramchandani (CA, M. com) (10823 Points)
Replied 06 March 2010

The time between the date on which loan is taken and 31 March of the year immediately before which the property is acquired or construction completed is called the pre-construction period.

1 Like

Rajendra Nath Datta (0) (101 Points)
Replied 06 March 2010

thanks for replying.

then in my question the preconstrcution period will be from 1.4.04 t0 31.3.07? Am I right?? actually i am getting confused wether the preconstruction period will be from 1.4.04 to 31.3.07 or from 1.4.04 to 31.3.08? plz help

CA Dhiraj Ramchandani (CA, M. com) (10823 Points)
Replied 06 March 2010

Ok, as per the language..

It should be 01.04.04 to 31.03.08... But just wait, let me take confirmation from some reliable source

C.Balaji (Learner) (1867 Points)
Replied 06 March 2010

Dear Dhiraj.....

I also feel that it will/should be 31.03.08.......

Amir (Learner) (4016 Points)
Replied 06 March 2010

Dear Friends,

Dhiraj Bhai has sited the provision............

So no doubt about it Pre construction period is from 01.04.2004 to 31.03.2007 (& NOT 31.03.2008)

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 06 March 2010

Yes the preconstruction period is from 01.04.2004 to 31.03.2007

C.Balaji (Learner) (1867 Points)
Replied 06 March 2010

Dear Amir bhai......

The construction complete on 31.3.08.....so it should be 31.03.08.........why 07.......

CA Dhiraj Ramchandani (CA, M. com) (10823 Points)
Replied 06 March 2010

Hi amir, yaar i got confirmed...

It should be 01.04.2004 to 31.03.2008

I visited a no. of sites and referred few examples....

But still, if u r sure, then do tell us the source

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 06 March 2010

Dear Dhiraj

You yourself have quoted the law on the same that "the time between the date on which loan is taken and 31 March of the year immediately before which the property is acquired or construction completed is called the pre-construction period". Since construction is completed on 31st March. 2008 the 31st March of the preceeding year which is 31.03.2007 should be taken.

Bala (Student) (498 Points)
Replied 06 March 2010

Prior period int is the interest frm date of borrowal till the end of the FY immediately preceeding the FY in which construction completed/property purchased.. since 31.3.2008 is the last date of the FY in which was construction was completed, the prior period is from 1.4.2004 - 31.3.2007

sheetal (ca) (31 Points)
Replied 06 March 2010

pre-construction period is FROM 1.04.04 TO 31.O3.07

saranraj (CA FINAL) (419 Points)
Replied 06 March 2010

DEAR BROTHERS,

PRECONSTRUCTION PERIOD IS THE FINANCIAL YEAR ENDING ON 31ST MARCH OF THE IMMEDIATELY PRECEDING YEAR OF THE FINANCIAL YEAR IN WHICH THE HOUSE PROPERTY WAS COMPLETED.

THE PERIOD IS FROM 01.04.2004-31.03.2007