Mr. A gave ₹ 5 lacs to a builder for purchase of flat in delhi and took a loan of ₹ 10 lacs. Finance Co. gave ₹ 10 lacs directly to builder for purchase of flat on behalf of Mr. A. Thus, total cost of flat purchased by Mr. A is ₹ 10 lacs.
The flat contruction was completed after three years i.e. three years after giving ₹ 15 lacs. During these three years, builder paid interest to Financ Co.
During the financial year 2012-13, Mr. A obtained possession of flat and paid interest of ₹ 300000/-.
Mr. A had now two flats one in delhi and 2nd in haryana.
Query is
How much deduction will be available on account of interest and in which manner.
Clarification sought on interest deduction eligibility for Mr. A's flats under tax rules after builder-paid interest period. Mr. A provided 5 lakhs to a builder and took a 10 lakh loan from a finance company for purchasing a flat in Delhi. The finance company paid the 10 lakh directly to the builder. The flat's construction was completed three years later, during which the builder paid interest to the finance company. Mr. A obtained possession in the financial year 2012-13 and paid 3 lakhs in interest. Mr. A owns two flats, one in Delhi and another in Haryana. The query seeks clarification on the available interest deduction and its application. A response asks if the issue has been clarified. (AI Summary)
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