Deduction of interest on housing loan.

[manoj gupta]

A person constructed ground floor of a house by taking a housing loan. This loan is still not fully paid. Now he constructs two additional floors on this house by taking a fres housing loan. Whether the interest on fresh loan is allowable as deduction from income from house property u/s 24.

AI Summary

Interest Deductibility on New Loan for Additional Floors: Section 24 Allows Full Deduction if Rented, 1.5 Lakh Cap Otherwise. A person inquired about the deductibility of interest on a new housing loan used to construct two additional floors on an existing house, where the original housing loan remains unpaid. Two respondents agreed that under Section 24 of the Income Tax Act, there is no restriction on claiming interest deductions for the new loan. If the property is rented out, the full interest amount can be deducted; otherwise, the deduction is capped at 1.5 lakhs.