whether able to avail deduction u/s 24(b) or not

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MEETA (Querist)
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21 July 2009 Dear sir/Madam,

I have undergone an agreement with Greater Noida Industrial Development Authority (GNIDA) that they let me construct a house at the cost of rs. 30 lakhs + interest Rs. 4 Lakhs.

Total Cost = Rs. 34 Lakhs to be paid in 8 half yearly instalments.

I have not taken loan from any financial institution. Instead i will pay instalments from my own sources.

But as total cost of house comprises interest amount now my question is that whether I am entitled to claim deduction of interest on borrowed capital of Rs. 1,50,000 p.a. us 24(b) of the Income Tax Act, 1961.

Abhishek Mohta

Abhishek Mohta (Expert)
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21 July 2009 Sec 24(b) specifically mentions that the assessee can claim deduction under sub-section (2) only if the assessee has taken a fresh loan and shall provide a certificate from the borrower.

As in this case no lender or laon is involve you will not be able to calim deductions u/s 24(2).