plot loan tax benefit

This query is : Resolved

sandeep (Querist)
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07 May 2008 I have purchased a residential plot and for that I have taken a loan from the LIC Housing Finance Limited.

My queries are as under:

1. Whether the principal amount paid during the year is eligible under Section 80C of the IT Act.
2. Whether the interest paid during the year is eligible under Section 24(b) of the IT Act.

Amit Sharma

Amit Sharma (Expert)
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07 May 2008 Dear Sandeep,

You are eligible u/s both 80 C as well as 24(b) as long as there is no work (modification) during this time.

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
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07 May 2008 I think my friend missed to type the word "not" while answering.

in my opinion

1) interest u/s 24(b) is allowable only after completion of construction of house property

2) deduction of principal u/s 80C is also avalibale after completion of construction

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Jitender

Jitender (Expert)
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07 May 2008 deduction u/s 24 (b) is not available till the completion of house.

Hari Venkata Ramana

Hari Venkata Ramana (Expert)
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08 May 2008 I fully agree with the views of Mr. Tyagi and Jitender. There is a provision in the act that If u purchase plot for construction of House, I understand there is a seperate provision/rule for this type of transaction which provide a condition that you may have to give an undertaken to construct the hose within specified period. But I am not sure about exact period, entilement.