Prashanth (Sr.) (51 Points)
25 September 2009
Ratan Deep Saxena
(Asstt Manager (Accounts & Finance))
(2998 Points)
Replied 25 September 2009
Preconstruction period interest is the interest paid to the bank from the date of loan till the date of completion of construction. Preconstruction period interest shall be liable to deduction U/s 24 of the income tax Act under the head house property. Pre construction period interest in ur example will be interest paid from 01.04.07 till 31.03.08.
regards,
ratan
As per sec 24(b), there will be no preconstruction period becz house is completed within the same year in which the loan is taken
while as per aforesaid section-"Interest for the period prior to the year in which the house was purchased or constructed shall be allowed in 5 annual equall instalments starting from the year in which the house was purchased or constructed".
However, interest for the currnent year shall be allowed in normal manner
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