Is interest only upto Rs.1,50,000/- allowable on housing loan u/s 24 of the Income Tax Act?

Last updated: 23 September 2021

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This Income Tax Appellate Tribunal case clarifies the deductibility of interest on housing loans. The Assessing Officer had restricted the deduction to Rs 1,50,000, but the Tribunal found that once rental income is accepted, the assessee is eligible for statutory deductions plus the full interest paid on the housing loan. Consequently, the Assessing Officer was directed to allow the full claim of Rs 6,58,556.

Court :
ITAT Delhi

Brief :
This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] � 13, New Delhi dated 25.06.2019 pertaining to assessment year 2014-15.

Citation :
ITA No. 7278/DEL/2019

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘SMC’ BENCH,
NEW DELHI [THROUGH VIDEO CONFERENCE]
BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
ITA No. 7278/DEL/2019
[Assessment Year: 2014-15]

Shri Opender Gupta
C/o Singhal Associates, 4th Floor,
4805, Bharat Ram Road, 24,
Ansari Road, Darya Ganj, Delhi

Vs.

The A.C.I.T

Circle – 39(1)

New Delhi

Date of Hearing : 15.09.2021
Date of Pronouncement : 15.09.2021
Assessee by : Shri Subhash Singhal, CA
Revenue by : Shri R.K. Gupta, Sr. DR
ORDER

The assessee has raised as many as six grounds of appeal. At the very outset, the ld. counsel for the assessee stated that he is not pressing Ground Nos. 1 to 4. The same are dismissed as not pressed.

2. The assessee carried the matter before the ld. CIT(A) and furnished the certificate from State Bank of Patiala. However, the ld. CIT(A) was of the firm belief that interest only upto Rs.1,50,000/- is allowable on housing loan u/s 24 read with second provison and accordingly, restricted the deduction to Rs.1,50,000/-.

3. In my considered opinion, once the rental income has been accepted by the Assessing Officer, the assessee is eligible for statutory deduction and, in addition, deduction for interest paid on loan for the purchase of house property. Considering the Certificate of State bank of Patiala, I direct the Assessing Officer to allow the claim of interest of Rs.6,58,556/-. Ground No. 5 is, accordingly, allowed.

4. In the result the appeal of the assessee in ITA No. 7278/DEL/2019 is allowed.
The order is pronounced in the open court on 15.09.2021 in the presence of both the representatives.

Please find attached the enclosed file for the full judgement

FAQ :

The core issue was whether the deduction for interest on a housing loan under Section 24 of the Income Tax Act was limited to Rs 1,50,000 or if the full interest paid could be claimed.

The Assessing Officer restricted the allowable deduction for housing loan interest to Rs 1,50,000.

The Tribunal ruled that the assessee is eligible for the full deduction of interest paid on the housing loan, provided the rental income has been accepted.

The Assessing Officer was directed to allow the full claim of Rs 6,58,556 as interest on the housing loan.

Based on this judgement, if rental income is accepted, the full interest paid on the housing loan is deductible, not limited to Rs 1,50,000.

Attached File : 1442821_4462_1631785966_7278_opender_gupta.pdf

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Judgement posted by

Poojitha Raam Vinay

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I simplify complex income tax, TDS, banking, and investment updates into practical insights for taxpayers, salaried professionals, pensioners, and senior citizens. I regularly write on ITR filing, tax compliance, savings schemes, and the latest financial rule changes in India.

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