Second property tax

Tax planning 266 views 3 replies

jagdhir

Others

24 Points Joined July 2015

Hi ,

I am currently staying in Mumbai , With two under construction properties in Gurgaon and Noida . I currently availing tax deduction for the Gurgaon property (Its been under construction for the last 6 years :( ) . Also i do not know when it will actually be delivered. The noida property on the other hand will be delivered next year. I understand that under section 54 i can claim deduction from income tax for an unlimited amount for the interest paid for both the properties . Kindly advise if i should be transfering the interest to section 54 or take the standard 2 lac benefit . Also the deemed to be let out clause for the second property how am i supposed to be calculating it for under construction properties.

Please advise the best way forward.

Rgds

Jagdhir

Replies (3)

CA SACHIN

practice

115 Points Joined July 2015

I cant understand that how can you take benefit of interest on under construction property and how can you take benefit under sec 54 which is of capital gain exemption Actual possession of property is necessary for house property income

CA Chandra Prakash

9873059766 Increasing knowledge through

296 Points Joined January 2011

Section 54 is applied for exemption of capital gain which arise due to transfer of property not for interest. Sec. 24b deals with the deduction of interest paid for house , however interest shall not be allowed for the period under construction of house. As you mentioned, both properties are under construction hence you r not eligible for claiming deduction for interest paid. However once property construction is completed then u can claim ur interest paid during the period under construction in 5subsequent year.

CA Chandra Prakash

9873059766 Increasing knowledge through

296 Points Joined January 2011

Section 54 is applied for exemption of capital gain which is arise due to transfer of property , not for interest paid. Sec. 24b deals with the deduction of interest paid for house , however interest shall not be allowed for the period under construction of house. As you have mentioned both the properties are under construction hence you r not eligible for claiming deduction for interest paid. However once property construction is completed then u can claim ur interest paid during the period under construction in 5subsequent year.