New house construction valuation certificate compulsory

Yes, it is compulsory to assess the value of a new house construction of Rs. 1 crore for FY 23-24. This assessment must be done by an engineer (income tax valuer).

Payment of construction expenses in cash mode above the limit of Rs. 10,000/- per day is not allowed under the Income Tax Act. If you have made such payments, you will need to show the procedure in your Income Tax Return.

• Assessment of New House Construction Value:

  • In the Income Tax Act, there is no specific requirement for a certification by an income tax valuer or engineer for assessing the construction value of a new house. However, it's essential to maintain proper documentation of the construction cost, including invoices, receipts, and other relevant records.
  • The assessing officer may ask for details during the assessment process, so having accurate records is crucial.

• Construction Expenses in Cash Mode:

  • According to the Income Tax Act, cash payments for construction expenses are subject to certain restrictions. Section 40A(3) of the Income Tax Act limits cash payments made to a single person in a single day to Rs. 10,000.
  • If the construction expenses exceed Rs. 10,000 in a single day, the excess amount should be paid through non-cash modes like cheque, bank draft, electronic transfer, etc.

    For further more detailed information on this topic visit: Deductions From House Property Income – Section 24

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