Applicability of Interest deduction

[Rahul Bagaria]

Under the IT Act, deduction of pre possession EMI interest can be claimed in 5 equal instalments for self occupied property.However is the same law applicable to self occupied property, if so then is it restricted to Rs.1,50,000

[CAGOPALJI AGRAWAL]

Rahul Ji Whether the property is self occupied or let out, the provisions are same. Of course, the limit is Rs. 1.50 lac in both cases.

[CAGOPALJI AGRAWAL]

Further to my view, the restriction of Rs. 1.50 lac is applicable to self occupied house only not on let out one.

[Ravi Chopra]

Yes, you can claim the benefit of interest paid prior to possession related to that property, in five equal installments. There is no ceiling limit in case of rented property. But in case of self occupied property the limit is Rs. 1.5 lakhs. I agree with the view of CA Gopal Ji Agrawal.

AI Summary

Interest deduction on pre-possession EMI allowed in equal instalments; cap applies to self-occupied property, not rented
Deduction for pre-possession EMI interest is allowed in five equal instalments beginning when possession is obtained; this spreading rule applies to both self-occupied and let-out properties, but the overall deduction for a self-occupied house is subject to a monetary ceiling of Rs. 1,50,000 while no similar ceiling applies to let-out property.