Deduction u/s 80C against repayment of loan on property

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

28 March 2011 Hello friends,

Our client obtained a flat under scheme of allotment,Possession of which is to be given after some time.Our client paid amount of Rs 5700000 against such allotment.Such disbursement of Rs 5700000 is made by obtaining a loan from bank.Now my query is that whether our client is eligible for deduction u/s80C against the principal amount repaid during the year against such loan.I have a doubt because our client does not have any possession right now i.e. he has only the right in property as only allotment is made to our client.So please consider the same & reply me as soon as possible,as i have to file the return for the same.

CA Navin Jain

CA Navin Jain (Expert)
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28 March 2011 possession right is necessary for claiming the deduction

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 March 2011 In the given situation, the assessee is not eligible to claim deduction under section 80C (2)(xviii)of the income tax Act,1961.

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Querist : Anonymous

Querist : Anonymous (Querist)

28 March 2011 Sir is this due to non availability of possession only.......? As our client has complete right in such property i.e. after some time as per the agreement he will surely get the possession of the property.