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DEDUCTION U/S 24 ( INT. ON HOME LOAN)

25 May 2007

Hello everybody

can you pls. clarify whether it is necessary to have the possession of house to claim deduction u/s 24 i.e int. on home loan, also pls clarify if loan taken as a home loan but only plot to construct a house is purchased and bank has issued the certificate u/s 24 to claim the deduction, can i claim deduction under above mentioned section.Pls. tell if there is any ruling with respect to this clause.

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7 Replies

Rajesh Bajaj (433 Points)
Replied 26 May 2007

you can claim deduction u\s 24 but construction should be completed within 3 years from the end of the financial year in which capital was borrowed Rule given below :- Interest on borrowed capital is deductible as follows: 1. If the following conditions are satisfied, interest on borrowed capital is deductible up to Rs 150,000. Capital is borrowed on or after April 1, 1999 for acquiring or constructing a property. The acquisition/construction should be completed within 3 years from the end of the financial year in which capital was borrowed. The person, extending the loan, certifies that such interest is payable in respect of the amount advanced for acquisition or construction of the house or as refinance of the principle amount outstanding under an earlier loan taken for such acquisition or construction. 2. If the conditions stated above are not satisfied, then the interest on borrowed capital is deductible up to Rs 30,000. However, the following conditions have to be fulfilled: Capital is borrowed before April 1, 1999 for purchase, construction, reconstruction repairs or renewal of a house property. Capital should be borrowed on or after April 1, 1999 for reconstruction, repairs or renewals of a house property. If the capital is borrowed on or after April 1, 1999, but construction is not completed within 3 years from the end of the year, in which capital is borrowed.

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Taroon Sharda (Job) (125 Points)
Replied 26 May 2007

if only plot is purchased in a residential area and construction not yet started and bank has issued the certificate u/s 24 for interest paid, in that case can i cliam deduction? pls. clarify this also thanks

Rajesh Bajaj (433 Points)
Replied 26 May 2007

YES You can claim deduction but you have to complete construction within 3 years from the end of the financial year in which capital was borrowed.

Raj Kr.Goyal (CA) (58 Points)
Replied 26 May 2007

I am agree with Mr .Rajesh Bajaj

(Guest)

Whether two people can enjoy the deduction for the same loan taken in the joint name.

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Rachit (Ca-Final Article.) (565 Points)
Replied 19 February 2011

Yes................

if both of them are the owner and getting rent from such property than both can enjoy ded. without any limit..............

buit in case of So property no one can ded. for more than 150000 in a year...........

Govind (Articled Assistant) (21 Points)
Replied 22 May 2013

deduction is on property and not the person therefore it must b available to any one of the party paing EMI of the loan taken for acquiring or constructon of house property