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

Pre-possession EMI interest deduction for self-occupied properties clarified: Claim in five installments with Rs. 1.5 lakh limit. A query was raised regarding the deduction of pre-possession EMI interest under the Income Tax Act for self-occupied properties. The discussion clarified that the interest deduction can be claimed in five equal installments. For self-occupied properties, the deduction limit is Rs. 1.5 lakhs, while there is no such ceiling for let-out properties. The responses from participants, including two chartered accountants, confirmed the applicability of these provisions, emphasizing the restriction applies only to self-occupied properties.