TaxTMI 
TaxTMI 
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.
Deduction of interest on housing loan.
14 Jul 2010 
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Deduction of housing loan interest for additional floors may be allowed where property is let out; limits apply for self-occupation.
No prohibition exists on claiming interest on a fresh housing loan used to construct additional floors of an existing house; interest attributable to that loan is deductible as housing loan interest. If the property is let out, the full interest may be claimed against income from house property; if the property is self-occupied, the interest deduction is subject to the statutory ceiling applicable to self-occupied house property and limited to that prescribed limit. (AI Summary)
No prohibition exists on claiming interest on a fresh housing loan used to construct additional floors of an existing house; interest attributable to that loan is deductible as housing loan interest. If the property is let out, the full interest may be claimed against income from house property; if the property is self-occupied, the interest deduction is subject to the statutory ceiling applicable to self-occupied house property and limited to that prescribed limit. (AI Summary)