Plz help me u/s 80c

Articleship 663 views 9 replies

can we claim a housing loan prinicipal repayment made before the completion of house u/s 80 C of incometax act 1961. ?

Replies (9)

kamal kishor sen

STUDENT Rajasthan

2156 Points Joined November 2009

Yes

vishnupriya

CA Final

1418 Points Joined July 2009

Yes you can........

Guest

no..no ded for house under construction..only principal repayment after completion is eligible.

Guest

no..no ded for house under construction..only principal repayment after completion is eligible.

vishnupriya

CA Final

1418 Points Joined July 2009

In sec 80C, it is no where said that deduction will be allowed only after construction................

Ritu Sedwal

Chartered Accountant

407 Points Joined May 2009

Originally posted by : Vishnupriya
	In sec 80C, it is no where said that deduction will be allowed only after construction................

True...u/s 80c repayment of principal amt of home loan can be claimed as deduction as soon as repayment of loan starts i.e.may before completion of house

Ritu Sedwal

Chartered Accountant

407 Points Joined May 2009

Originally posted by : Raj CA final
	no..no ded for house under construction..only principal repayment after completion is eligible.

This condition is applicable is case of deduction u/s24b....deduction for interest amt

Guest

no...read this and understand...

Though the deduction is available under Section 80 C (xviii) for the purposes of purchase or construction in respect of repayment of loan taken for the purpose of construction of a house property, the eligibility to claim such deduction happens only when this property becomes a house property and income from which is chargeable to tax under the head “Income from house property”.

The income in respect of any under construction property does not become taxable under the head income from house property immediately on your booking the property or commencing the construction. This only will become taxable when the assessee becomes owner of the property as defined in Section 27 of the Income Tax Act.

Ownership of the property is important

Few builders and bankers are luring the prospective buyers into availing full or substantial portion of the loan in respect of the under construction property assuring them that they will be entitled to claim tax benefits in respect of the repayment of the loan made to the lender bank while the property is still being constructed. But this is not true.

From the above discussion it becomes clear that in case you have repaid any principal component before taking possession of the property, the same will not be available for any tax benefits.

A close look at clause (xviii) stated above suggests that for the principal repayment to be considered for tax rebate under Section 80C, there should be an income (or notional income) from the house property. When a property is under construction, there is no likelihood of income, and hence under Section 80C there is no provision for tax rebate on account of principal repayment. Only in the year in which the construction is completed can the principal repayment be considered for tax rebate.

hope this clears all doubts...