Focus (CA-Final Student) (272 Points)
11 August 2013Could someone explain me section 27 of the Income tax act.
If a person has taken a loan for a flat , and the construction of the building is completed within 3 years, however, the person has not yet taken possession of the flat, is he considered a deemed owner.
If this property is deemed self ocuupied property of such person can he tak dedcution under section 24 w.r.t Interest on loan to the extent of rs. 150000 or only Rs. 30000.
Please clarify.
thanks & rgds
shikhar
(LEARNER )
(1394 Points)
Replied 11 August 2013
Helloo....Friend
Deduction for intrest wil be taken only from that year from which loan has been repaid fully OR the property acquired.
For example if u acquired a property on 1st may 2013, then u can clain all the interent (till march 2013) in 5 equal instalments.
if your total interest is 50,000 (till march 2013) then u can clam 50000/5= 10000+ intrest of current year (from 1st april 2013 to 31st march 2014) in fy 2013-14
in case of self occupied property u can clain deduction 30000/150000
Rs 150000 if ,u borrowed on or after 1st april 1999 and construction is completed in 3 years from the end of fy in which the capital is borrowed.
THANK YOU
SHIKHAR
Mihir
(Wealth Manager)
(5293 Points)
Replied 11 August 2013
Interest on housing loan cannot be claimed before possession.
Focus
(CA-Final Student)
(272 Points)
Replied 11 August 2013
But as per section 27 of transfer of property the assessee is a deemed owner of the property and so he can claim deduction of Rs. 150000 if the completion of construction is before three years even if he has nto taken possession as there is an agreement and he has a right in the property. Am I correct?
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 11 August 2013
Dear Focus,
you are not a deemed owner for the said property.
As you must have paid the substantial amount to the owner and must have allowed to take possession, then only you would be considered as a deemed owner, which is not the case here.
Kindly read Sec. 27(iiia) of I.T. Act.
And thus, you can't claim interest on the said property.
Best Regards,
CA Lovely Arora
ca.lovelyarora @ gmail.com
+91-9891400405
shikhar
(LEARNER )
(1394 Points)
Replied 11 August 2013
YOUR CASE IS DIFFERENT THEN TRANSFER OF PROPERTY............in your case u r not deemed owner....until u not accuired the property OR fully repaid the loan
READ THE BELOW...
Focus
(CA-Final Student)
(272 Points)
Replied 13 August 2013
But the property for which the loan has been taken, construction has been completed
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 14 August 2013
Dear Focus,
But as also said by others... you are not a deemed owner of the house, till now.
On the date when you will make payment of the house and take possession or the date on which house is registered on your name, thereafter you are free to claim the interest payment made by you as deduction u/s 24(b). Not before that.
Best Regards,
CA Lovely Arora
ca.lovelyarora @ gmail.com
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