Construction of house is carried out with borrowed capital from bank. As per loan agreement, moratorium period is 18 months. During moratorium period I am paying intrest only. House is not yet completed.
Whether intrest is deductible u/s 24 before completion of house when EMI is applicable?
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House property income
Replies (12)
applicable
Thanks, You want to say you can claim interest charges as deduction u/s 24. Then what about pre-construction deduction in after completing of construction in five equal installments?
Capital borrowed on after 1-4-99 than construction completed within 5year than u/s 24 is applicable for deduction on interest of borrowing loan.
interest paid before the completion of house property to be claimed as pre period interest (1/5th ) after the completion of construction
Rama Krishnan is correct.
Normally Banks and financial institutions are lending H/B loans to person whether the property stands in his/her name, spouse name or in the name of parents. In case where borrower is not real owner of property he/she has to apply for loan jointly with owner of property. In such cases whether borrower is entitled for deduction or owner?
only owner is eligible for interest deduction
Really?
As replied, Rama Krishnan only owner is entitled for deduction. I have doubts as I came across cases where bank are lending H loan for Construction of house to the employee of organizations where land stands in the name of parents and deduction are effected from salary of employees who is borrower of loan. Parents is just co-applicant and guarantor to the loan. Whether such practice is legal?
in such cases, parents automatically becomes the co-owners of the property who have substantial interest in the property so both employee as well as his parents are eligible for interest deduction
Thanks, Rama Krishnan
welcome mr. Raju patnaik
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