Is A Certifcate From Bank/Institution Necessary For Claiming Interest Deduction?
April 12, 2007 by taxworry · Leave a Comment
I would like to know:
1. Can I claim the Pre EMIs paid after 1st October 2006 as housing loan interest and deduct it from my income. Or shall I consider all the pre emi as pre construction cost and claim 20
% each year?
2. in March I have paid installment on 10th March. So what will be the treatment of the interest due for the period from 11th March to 31st March? brijesh_thakkar@hotmail.com
- Whatever interest paid/payable upto date of completion is allowed four installment starting the FY in which the house was completed.
- Whatever interest paid/payable from date of completion to 31st March is claimable in in Full
- A certificate is necessarily to be attached with the Return for claiming of interest deduction.
- “Provided also that no deduction shall be made under the second proviso unless the assessee furnishes a certificate, from the person to whom any interest is payable on the capital borrowed, specifying the amount of interest payable by the assessee for the purpose of such acquisition or construction of the property, or, conversion of the whole or any part of the capital borrowed which remains to be repaid as a new loan.”
Therefore simple solution for such dilemma is to obtain certificate regarding loan repayment from the Bank/institution which advanced you loan. This certificate is necessarily to be enclosed with the Return of Income if you want to avail the deduction of interest under section 24 and principal under section 80C. You should obtain the certificate in following manner
Interest paid upto 30/9/2006 xxxx
Interest paid from 1/10/2006 to 31/3/2007 xxxx
principal paid upto 31/3/2007 xxxx
Whatever is shown as paid upto 30/9/2006 shall be allowed in four installment ,starting FY2006-07 and interest paid from 31st October to 31/3/2007 is claimable as deduction. Principal amount is claimable u/s 80C.
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