Section 24 benefit

Tax queries 909 views 7 replies

krishnan

employed

38 Points Joined January 2009

I am a Central Govt employee and had availed Departmental House Building advance in 2001. The procedure for recovery for Departmental loans is that the Principal amount if first recovered adn once that is completed, the accrued interest(calculated on outstanding balance at the end of the months) is recovered in further instalments.

My Principal recovery started from 2002 and ended in 2009 September. The interest recovery has started from Oct 09.

The question is can I avail of the benefit of Section 24 of Income Tax act at this stage. The general opinion is that as per Section 24, Interest payable is eligeble for Section 24 benefit, adn that would mean I should have availed the Sectin 24 benefit only during the year of accruals and not now (when it is actually being recovered) There is also a IT board's circular No 363 of 1983 for this.

Is there any other circular in respect of this, OR is there any other remedy to avail income tax benefit at this stage when the interest is being recovered now.

Pl help. Thx in advance

Replies (7)

Kapil Sharma

Article

68 Points Joined June 2009

sir as per my opinion interest is also accrued after sep 09, there for u can claim this deduction

Priyanka

Chartered accountant

371 Points Joined September 2007

sir, u can claim amount of interest recovered even though u have taken loan in 2001. this is because u r department has different procedure to recover loan and accordinly interest recovery has started in this financial year. however, maximum deduction is Rs. 1,50,000 per financial year

krishnan

employed

38 Points Joined January 2009

Hello Kapil and Priyanka.

Thx for your reply. But as I had said in my post -- the Income Tax circular 363 of 1983 is coming in the way. For that matter even till date Section 24 wordings are "interest payable" So the word payable is creating problem for me.

I do remember some clarification from Income tax in this regard but unfortunately I am not able to lay my hands on it.

Help if possible. Thx

Hareesh H Sharma

Cleared IPCC..now article

894 Points Joined September 2009

Sir,

i think you should have claimed it from the beginning...because as there is no principal amount left interest wont accrue on that right..you could have claimed it during earlier years when u repaid principal because the interest would have been accrued on such amount but it was paid only later..

krishnan

employed

38 Points Joined January 2009

Thx Hareesh.

That is the opinion I am getting from everyone including my Administration.

I just wanted to know whether there is another side to this opinion.

Thx for your inputs.

Hareesh H Sharma

Cleared IPCC..now article

894 Points Joined September 2009

Ur welcome Krishnan

I asked my dad about this who himself is a central govt emplyee..He himself said the same and said ppl forget this matter and latter claim it when they actually pay the interest lik your doing nw..Many of them get through that too..But u cant claim it as per the act it seems