80C Deduction - Housing loan repayment
This query is : Resolved
18 March 2008
Two residential house properties are purchased, one in 2004 and another in 2006, each under an housing loan availed from 2 different banks. Whether assessee can claim deduction u/s 80C on repayments of both these loans for AY 2008-09? [or whether the section permits deduction on only one (first)housing loan pertaining to one property only?]
Will the answer be different if in the above case, second loan is availed to construct first floor on the same property?
[The loans are used for construction only and not for any repair / renovation in the above cases]
The above queries are with specific reference to the later restrictive provision of the same section. The A.O interprets that any additional loan availed, whether used for constructing additional floor or a new building, after completion of construction or obtaining possession of first property or ground floor, will not qualify for deduction for its repayment.
Will the answer be different if in the above case, second loan is availed to construct first floor on the same property?
[The loans are used for construction only and not for any repair / renovation in the above cases]
The above queries are with specific reference to the later restrictive provision of the same section. The A.O interprets that any additional loan availed, whether used for constructing additional floor or a new building, after completion of construction or obtaining possession of first property or ground floor, will not qualify for deduction for its repayment.
18 March 2008
Point No. xviii of Sec 80C provides as follows:
xviii) For the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head Income from house property (or which would, if it had not been used for the assessees own residence, have been chargeable to tax under that head), where such payments are made towards or by way of
(a) any instalment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or
(b) any instalment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or
(c) repayment of the amount borrowed by the assessee from
(1) the Central Government or any State Government, or
(2) any bank, including a co-operative bank, or
(3) the Life Insurance Corporation, or
(4) the National Housing Bank, or
(5) any public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes which is eligible for deduction under clause (viii) of sub-section (1) of section 36, or
(6) any company in which the public are substantially interested or any co-operative society, where such company or co-operative society is engaged in the business of financing the construction of houses, or
(7) the assessees employer where such employer is an authority or a board or a corporation or any other body established or constituted under a Central or State Act, or
(8) the assessees employer where such employer is a public company or a public sector company or a university established by law or a college affiliated to such university or a local authority or a co-operative society; or
(d) stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee,
but shall not include any payment towards or by way of
(A) the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member; or
(B) the cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out; or
(C) any expenditure in respect of which deduction is allowable under the provisions of section 24;
Conclusion: Hence, there should not be any problem for claiming sec 80C Deduction as the loan is taken for 2 different houses. In case, the loan is taken for the same house, point no. (B) should be taken care of.
xviii) For the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head Income from house property (or which would, if it had not been used for the assessees own residence, have been chargeable to tax under that head), where such payments are made towards or by way of
(a) any instalment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or
(b) any instalment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or
(c) repayment of the amount borrowed by the assessee from
(1) the Central Government or any State Government, or
(2) any bank, including a co-operative bank, or
(3) the Life Insurance Corporation, or
(4) the National Housing Bank, or
(5) any public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes which is eligible for deduction under clause (viii) of sub-section (1) of section 36, or
(6) any company in which the public are substantially interested or any co-operative society, where such company or co-operative society is engaged in the business of financing the construction of houses, or
(7) the assessees employer where such employer is an authority or a board or a corporation or any other body established or constituted under a Central or State Act, or
(8) the assessees employer where such employer is a public company or a public sector company or a university established by law or a college affiliated to such university or a local authority or a co-operative society; or
(d) stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee,
but shall not include any payment towards or by way of
(A) the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member; or
(B) the cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out; or
(C) any expenditure in respect of which deduction is allowable under the provisions of section 24;
Conclusion: Hence, there should not be any problem for claiming sec 80C Deduction as the loan is taken for 2 different houses. In case, the loan is taken for the same house, point no. (B) should be taken care of.
18 March 2008
CLAIMING EXEMPTION ON MORE THAN ONE HOUSE IS ALLOWED. IN FACT IAM CLAIMING EXEMPTION FOR TWO HOUSE PROPERTIES. I DID NOT FIND ANY PROBLEM. BUT REMEMBER YOU CANNOT CLAIM EXEMPTION FOR ALTERATIONS MADE AFTER COMPLETING / OCCUPYING/ ALREADY LET OUT/ AFTER COMPLETION CERT. OBTAINED FOR THE SAME PROPERTY AGAIN AS SAID BY SRI SAILLESH.
R.V.RAO
R.V.RAO
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