Interest on loan for commercial property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 December 2011 Assessee construct commercial property. Availed Loan. Aft completion he lets out to the firm in which he is partner. can assessee claim u/s 24 the interest on loan? is it allowed? Or the interest is allowed as deduction only for house property non commercial in nature?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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30 December 2011 Section 22 of the Income Tax Act is the charging section for taxing income from house property.

Section 22 does not make any distinction between residential property or commercial property.

Rental income earned from both types of property are taxable under 'Income from House Property'.

Section 24 of the Act provides deduction for interest paid on loan taken for construction of building.

Deduction is available for residential as well as commercial building.

Therefore, in the above case, interest will be allowed as deduction.

Abhishek Ranjan Singh

Abhishek Ranjan Singh (Expert)
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30 December 2011 Take the rent from firm and show it as a income of partner and you can deduct interest from this income.

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Querist : Anonymous

Querist : Anonymous (Querist)

30 December 2011 hw abt principal repay? 80c poss?

Abhishek Ranjan Singh

Abhishek Ranjan Singh (Expert)
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30 December 2011 Maximum 1 Lakh you can claim.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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30 December 2011 Deduction u/s 80C for repayment of Principal amount of loan is allowed only for a RESIDENTIAL house property.

Accordingly, in this case, deduction u/s 80C will not be available.

Querist : Anonymous

Querist : Anonymous (Querist)

30 December 2011 S it states residential....so only asked.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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30 December 2011 Dear Abhishek, deduction for principal repayment is allowed only for RESIDENTIAL PROPERTY and not COMMERCIAL PROPERTY.

In this case, deduction will not be available.

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Abhishek Ranjan Singh

Abhishek Ranjan Singh (Expert)
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30 December 2011 Yes Siddhartha you are correct.
Thankyou for correcting me.
Actualy i was confused in 2 queries. an other one is about housing loan. any way thanks again.

Abhishek Ranjan Singh

Abhishek Ranjan Singh (Expert)
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30 December 2011 Yes Siddhartha you are correct.
Thankyou for correcting me.
Actualy i was confused in 2 queries. an other one is about housing loan. any way thanks again.