Sujit Talukder (service) (719 Points)
12 May 2008Is repayment of Housing Loan - Principal amount is eligible for deduction u/s 80C when the house is under construction and that interest is not eligible u/s 24 under the head Income form House Property?
Sandhya
(Service)
(0 Points)
Replied 12 May 2008
the sec.80C does not discuss about the completion of the construction. So, the deduction can be claimed.
Sujit Talukder
(service)
(719 Points)
Replied 12 May 2008
Thanks for the reply. I was also thinking so.
Rushikesh
(Chartered Accountant - Manager Finance)
(2375 Points)
Replied 12 May 2008
Hi,
However the Section 80C also states that the income from this house property should be chargeable under Income from house property. But since the house is under construction the question of income does not arise and hence the deduction cannot be claimed.
Sandhya
Charudatta Kulkarni
(Asst Manager)
(130 Points)
Replied 12 May 2008
i would like to speak practically. If u take the home loan, up to ur construction stage u pay Pre-EMIinterest which doesnot include principal part. After construction is over, then only EMI starts which include principal component.
I think these speaks all
Sandhya
(Service)
(0 Points)
Replied 12 May 2008
Hi,
There is an option while you take the loan whether you have to start the payment of EMIs immediately even on partial disbursement. In this case you've even the principal repayment as your interest on partial disbursement is lower than the total EMI you repay.
Rushikesh
(Chartered Accountant - Manager Finance)
(2375 Points)
Replied 13 May 2008
Hi,
The Section 80C says
(xviii) for the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head "Income from house property" (or which would, if it had not been used for the assessee’s own residence, have been chargeable to tax under that head), where such payments are made towards or by way of—
a) any instalment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or b) any instalment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or c) repayment of the amount borrowed by the assessee from— 1) the Central Government or any State Government, or 2) any bank, including a co-operative bank, or 3) the Life Insurance Corporation, or 4) the National Housing Bank, or 5) any public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes which is eligible for deduction under clause (viii) of sub-section (1) of section 36, or 6) any company in which the public are substantially interested or any co-operative society, where such company or co-operative society is engaged in the business of financing the construction of houses, or 7) the assessee’s employer where such employer is an authority or a board or a corporation or any other body established or constituted under a Central or State Act, or 8) the assessee’s employer where such employer is a public company or a public sector company or a university established by law or a college affiliated to such university or a local authority or a co-operative society; or d) stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee, A) the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member; or B) the cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out; or C) any expenditure in respect of which deduction is allowable under the provisions of section 24
Therefore, The Stamp Duty and registration can be claimed but not the principal repayment. As the Income is not chargeable under the Income from House property yet.
Sowmya Lakshmi
(Chartered Accountant)
(27 Points)
Replied 05 June 2010
can you please tell me under which section or rule we can not claim ?
CAclubindia
