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Purchase of plot-deduction-u/s 80C

Madhu (student) (65 Points)

29 June 2010

Dear Sir,

whether the benefits of section 80C is availbale if Home loan is taken for the purchase of plot from LIC Housing finance as per the provisons of Sec.80C

80-C allows a deduction only in respect of principal repayment of loan taken for purchase or construction of a residential house.

My query is in the Provisonal Certifiacte of Instalment it is mentioned that pupose is to purchase of flat is the benefits of 80C and Sec.24 is availbale to the assess

Please help me with the above problem

Thanks in advance

K Madhusudhana Rao

CA final student

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7 Replies

DT Fundas - Tarun rustagi ( Author) (1150 Points)
Replied 29 June 2010

dear madhu

according to my point of view section 80C is available only on residential houses that means if a house is under constructed or not in condition to be said a residential house then sec.80C is not available as in ur case. so now u can not claim principal amount deduction.

regards

tarun rustagi

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C.Balaji (Learner) (1867 Points)
Replied 29 June 2010

Agree with Mr.tarun rustagi...

Sec 80C clearly states that deduction is allowed for Principal repayment of Housing loan availed for Purchase or Construction of Res. house... It points out that Pre construction Principal is not eligible for deduction only Post construction Principal repayment is allowed as deduction...

Madhur (N. A.) (151 Points)
Replied 29 June 2010

Dear Madhu,

As LIC has dibursed you the loan as "Home Loan", you may claim deduction U/s. 80C

Hitesh Sharma (Articled Assisstant) (24 Points)
Replied 30 June 2010

Dear Madhu,

You can claim deduction u/s 80C for the payment of principal amount only from that financial year in which the construction gets completed or when you get the posession of the house so constructed or purchased by you respectively.

As regards the interest portion you can claim deduction u/s 24(b) for a maximum of Rs. 150000/- as it is a self occupied property. The Pre-Construction Interest can be accumulated and can be claimed over a period of 5 years proportionately i.e. 1/5th of the intererst from the year in which your construction got completed.