03 November 2010
I have purchased a Plot (Land) with the housing loan and i have to pay monthly EMI(principal & Interest)i will be constructing a house only after 3 yrs
my freind told me that i can claim interest and principle if i could complete the construction of house on that plot within 3 yrs from the end of year of loan taken
please see the link below and advise https://www.caclubindia.com/experts/exempiton-of-loan-on-purchase-of-plot-36586.asp
03 November 2010
Till the house is completed, interest will not be allowed. After the completion, interest during construction period will be allowed in five equal yearly instalments starting from the year of completion. For full details pl read explanation to section 24(b) in www.incometaxindia.gov.in
03 November 2010
Interest on Loan cannot be claim in current year, it may be accumulated and after completion of HP, claim in 5 equal installment.
Like other said that interest allowed to claim, after loan taken even for plot ( STILL HP NOT BUILT ) then IT not give explanation about accumulated interest.
24 (b) EXPLANATION:
Where the property has been acquired or constructed with borrowed capital, the interest, if any, payable on such capital borrowed for the period prior to the previous year in which the property has been acquired or constructed, as reduced by any part thereof allowed as deduction under any other provision of this Act, shall be deducted under this clause in equal instalments for the said previous year and for each of the four immediately succeeding previous years:]
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