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Gauri Agarwal (Not applicable) (181 Points)

13 October 2012

how to calculate interest in income from house property under statutory deduction u/s24...........please help

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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

Interest on borrowed capital on accrual basis + 1/5th of the interest, if any, belonging to pre-construction period.

<------------------------------Pre Construction Period--------------------------------------->

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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