Garvit Dave (Portfolio Analyst & Tax Consultant) (295 Points)
08 November 2011Thanks & Regards
Garvit Dave
ashish gupta
( student)
(1922 Points)
Replied 08 November 2011
you can claim interest on let out house as well
Phalgun
(Audit Manager)
(327 Points)
Replied 08 November 2011
As per Scetion 24(b) interest on preconstruction period loan is allowed in five equal installments for self occupied - maximum Rs.30000(If loan is taken prior & upto march 31 1999) otherwise maimum - Rs.150000. For let out no limit.
Pre construction period means the period commencing from the date of borrowal of loan & ending on the date of repayment of loan or march 31st of the year in which the property was constructed or renovated or repairs and renewals taken up.
Garvit Dave
(Portfolio Analyst & Tax Consultant)
(295 Points)
Replied 08 November 2011
Hi Guys,
Thanks for your prompt reply.
I understand as per IT law (section 24), I can claim tax exemption on this amount X by claiming deduction in 5 equal installments in the next 5 years.
My CA says the above is valid only for self occupied house and not let out house. Is that correct?
can I claim for let out house?
ashish gupta
( student)
(1922 Points)
Replied 08 November 2011
you can claim pre constuction period interest for let out house as well
Garvit Dave
(Portfolio Analyst & Tax Consultant)
(295 Points)
Replied 08 November 2011
Thanks Ashish & Phalgun,
Gud luck for your future endeavors!!!
Garvit
Mary Asha
(Chartered Accountant)
(112 Points)
Replied 09 November 2011
Giridhar S Karandikar
(Team Lead)
(7548 Points)
Replied 11 November 2011
The explanation to section 24 states as follows:
Explanation.—Where the property has been acquired or constructed with borrowed capital, the interest, if any, payable on such capital borrowed for the period prior to the previous year in which the property has been acquired or constructed, as reduced by any part thereof allowed as deduction under any other provision of this Act, shall be deducted under this clause in equal instalments for the said previous year and for each of the four immediately succeeding previous years:]
the explanation nowhere states that no deduction will be allowed if the property is being let out. Also Sec24 does not states anywhere the tax deduction on account of pre-construction interest is not allowed.
CAclubindia
