Exemption u/s 24 for home loan

This query is : Resolved

Satyam Chadha (Querist)
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02 February 2009 Dear Sir

Please advice whether I should allow deduction under Sec 24 towards intrest on Home Loan if the assesee has taken a Home Loan & has started paying his EMI but has not got possession of house in curent financial year. The assessee is currently residing in a rented house & claiming HRA also.

For Principle amount he is claiming deduction u/s 80 C.

Regards
Satyam

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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02 February 2009 1) You should not allow deduction u/s 24 since the assessee is not in possession of the house. However such interest can be allowed in five equal annual instalments from the year in which the house has been acquired by the assessee.
2)If the house is incomplete claim u/s 80C for the principal is also wrong.