Tax exemption

Tax planning 433 views 4 replies

CA Neha Agrawal

830 Points Joined June 2008

An individual has availed land loan from a bank. The interst certificate issued by the financier mentions the loan as Home Loan. But while availing the Land loan there was no condition put forth by the financier that he has to construct the house within the specified period.

Now the individual wants to claim tax beenfit on interest paid on the loan as Home loan. Though construction of house is not done. Lans purchased from the loan is taken only for investment purpose.

I am not in favour of him claimimg tax benefit as Home Loan. Kindly advice what should be done.

Replies (4)

Deepak Tapse

Accounts Manager - Taxation

1771 Points Joined April 2009

I think you can claim deduction based on certificate issued by the financer. Also risk will be on shoulder of client. Lets see other's view also.

Swami Ayyappa Nuli

TAX ADVISOR & CONSULTANT AT G.S.T SUVIDH

1372 Points Joined June 2012

Interest paid during the construction period is "Pre-Construction Interest" which can be claimed only from the year in which construction has been completed.In your case as construction is not completed no chance to get Interest deduction under the head "Income from House property" and one of the pre condition to tax an income under this head is there should be some Building(Super structure) to land appuarent to ,so unless you construct house,you can not claim benifit under this section.If you construct you can claim it.