INCOME FROM HOUSE PROPERTY

[S.C. WADHWA]

An assesse received the letter depicting Temporary Permission to carry out furniture work in flat purchased subject to inter alia terms & conditions as below:

That flat is ready for occupation but we (builder from whom flat purchased) is yet to receive occupation certificate From Municipal Corporation.

Please advise whether upon receipt of such letter, the deduction towards interest paid on loan for purchase of this property can be claimed in determining the income from house property

[KASTURI SETHI]

This query has again appeared. Since it pertains to Income Tax Act, experts in this field are requested to throw light.

I am not expert in Income Tax, as per my knowledge, you will be entitled to deductions towards interest paid on loan from the date of possession letter for future only and not retrospectively.

Looking forward to experts in Income Tax Act for enrichment of my knowledge.

[Ganeshan Kalyani]

in my view as a builder he can take deduction of interest paid on Loan taken for construction.

AI Summary

Deduction of interest: entitlement may commence from possession letter for future periods even without occupation certificate.
Whether interest deduction for a purchased flat begins when a possession/temporary permission letter is issued despite absence of an occupation certificate; one view limits deduction to periods after the possession letter (prospective only), while another view treats interest on construction loans as deductible by the builder.