Loss from Interest from a house property not yet acquired

Page no : 2

suresh (Consultant) (31 Points)
Replied 21 May 2010

Hi,

I took a housing on 2003 september and the construction of the same got completed in 2004. currently i am staying in that house and claim the tax deduction(1.5 lac) as prescribed for interest. I did not realze fact i can claim deductions for another housing loan. The second one was purchased in my native place by taking a housing loan in the year 2005 April. I purchased this from my relative, who had constructed this house in 1997.

My question is, since i have not claimed any tax deduction for this second house for which i am paying an emi, can i show this as cost while selling this house to gain on capital gains tax. If this is not possible, how can use this unclaimed benefit. Please suggest me, i am planning to file my returns now June(2010) for the year 2009-2010.

thanks and regards

Suree

shailendra (C.A. FINAL) (189 Points)
Replied 21 May 2010

Dear all.

As per section 2(47), transfer of a right in immovable property amounts to transfer. Thus it is taxable under head capital gains. Interest cost will certainly form part of cost of acquisition for the purposes of section 48 because it is an expense for the acquisition of right in property.

And all the provisions of income tax act will apply normally. Thus indexation will be given to the assessee for the payment of interest. Different indexation for each year of interest payment.