Income from house property

Under section 24(a) of Income from House property,we can claim deduction of Interest paid up to rs 30,000 or 1,50,000 as the case may be.so my doubt is as follows,if i take a home loan for the construction of a House property on 2002(i.e after 1999) and Construction is completed in 2004(i.e with in 3 years of My borrowing)  and in 2005(i.e after 1999) again i take another loan for construction of second floor on the same building and it is completed in 2006(i.e with in 3 years) now in Assessment year 2012-13,iam paying an Interest of rs 1,10,000 on First Loan and rs 40,000 on Second loan.now What amount is deductible under section 24(a) as Interest? and Loan taken for construction of second floor can be taken as for Construction purpose or should be taken as for repairs or renovation? and Reassume if second Loan is taken for repairs purpose is rs 1,40,000 allowed as deduction as Interest under section 24(a)?In the above case assume it is fully self occupied! and My second doubt is as follows

if i has a House property and consists of Ground floor and First floor and Ground floor is self occupied and First floor is let out,then How to show in IT return?i.e am i show as Ground floor as self occupied and First floor as let out property?if so,can i take interest deduction seperatly? and if in the next year if first floor too self occupied then Interest deduction under section 24(a) can be claimed up to rs 1,50,000 in second year where as in first year i take interest deduction up to rs 30,000?

Replies (1)

With regards to deduction u/s 80C as well as u/s 24(b), "possession" has a significant meaning while filing returns. If the assessee is not in possession of a flat which is under construction and on which a home loan is taken, deduction u/s 80C shall not be available. However, deduction u/s 24(b) shall be available after the possession, and the pre-possession interest incurred can be availed in 5 equal installments, including the current years interest, which must not exceed Rs. 150,000/-.

It shall depend on the type of building and ownership to determine whether it is part of cost of acquisition or cost of improvement when you are constructing additional floor above the ground floor.

 

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