Section 24 - Exemption of the Interest charged by Builder

This query is : Resolved

Deepak Gupta (Querist)
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12 January 2020 I booked the flat on construction linked EMI plan in 2011 and got the possession in 2017. However builder also charged me Interest on delayed payment of EMI. Please suggest If I can claim this interest u/s 24 of the income tax act.
For example, if the interest amount is Rs 100, Can I claim 1/5th of the same Rs 20.00 in next 5 financial years after possession u/s 24 or other section of the IT Act.

Please suggest along with IT rulings and case study in such cases.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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15 January 2020 In my view, you have not borrowed from the builder any capital (Loan) to purchase the house.
You might have paid EMIs by borrowing capital. Interest paid towards loan can be claimed. Extra Interest paid to builder due to late EMI payments can be added to the cost of the house.