how to calculate interest in income from house property under statutory deduction u/s24...........please help
1 Replies
Deepak Gupta
(CA Student)
(15922 Points)
Replied 14 October 2012
| Originally posted by : Gauri Agarwal | ||
 |
how to calculate interest in income from house property under statutory deduction u/s24...........please help |
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Interest on borrowed capital on accrual basis + 1/5th of the interest, if any, belonging to pre-construction period.
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<------------------------------Pre Construction Period---------------------------------------> |
|
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Day of commencement of construction OR Day of borrowing whichever is later |
Ending on March 31 immediately prior to the year of completion |
Pre construction Interest = Funds borrowed X rate of interest X pre construction period
1/5th deduction, for 5 consecutive years, starting from the previous year in which property is acquired or constructed.
> Interest on fresh loan taken to repay the original loan = deductible
> Interest on Interest = Not deductible
Interest on Borrowed Capital:
1) Let out/Deemed to be let out
o On accrual basis + 1/5th of interest, if any, of pre-construction period
o Entire interest allowed as deduction.
2) Self Occupied
o Max 150000 (incl. 1/5th of pre construction period)
o for acquisition or construction
o loan taken on or after 1.4.99
o construction completed within 3 years from the end of financial year in which loan was taken
o certificate received from lender
o New loan also covered
o Any other case = 30000
Interest payable outside india is not allowed as deduction if TDS has not been deducted and there is no person in India who may be treated as an agent.
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