you will be voted according to your given Answer,

Particulars Pre-construction period Post-construction period Starts from The day of commencement of construction or the first day of the previous year in which the day of borrowing, whichever is later construction is completed Ends on March 31 immediately prior to the year of When loan is fully paid completion of construction Tax treatment The Interest incurred during aforesaid period shall The interest expenses for the year (on accrua be accumulated and allowed as deduction in 5 basis) shall be allowed as deduction in the equal installments from the year of completion respective year. of construction f38 Other Points (a) Interest on borrowed capital is allowed on accrual basis even if the books of account are kept on cash basis (b) Interest paid on fresh loan, which is taken to repay the original loan (being taken for above mentioned purpose shall be allowed as deduction (c) Interest on new loan, taken for paying outstanding interest on old loan, is not deductible (d) Amount paid as brokerage or commission for arrangement of the loan, is not deductible (e) Interest on loan taken for payment of municipal tax, etc. is not allowed as deduction Amount not deductible from Income from house property (Sec. 25) Any interest chargeable under this Act which is payable outside India, is not allowed as deduction if on such interest, tax has not been deducted at source and paid as per the provision of chapter XVIIB; and in respect of such interest there is no person in India who may be treated as an agent u/s 163 . ILLUSTRATION 10 Following information are provided by an assessee for his house properties for computing interest on loan allowe u/s 24(b): Particulars HP3 HP4 HP5 HP1 20.000 HP2 30,000 10,000 25.000 15.000 17.000 20,000 25,000 30,000 18.000 10,000 12.000 13.000 14,000 16.000 10,000 10,000 10.000 10,000 10,000 2.000 2,000 2.000 2.000 2.000 (a) Interest on loan taken for repair of H.P. (b) Interest on loan taken for purchasing H.P. (50% paid) (c) Interest on new loan taken for repaying old loan which was taken for purchasing H.P. (d) Interest on loan taken for payment of interest on earlier loan (e) Interest on loan for payment of Municipal tax (0) Interest on loan by mortgaging HP3 for business purpose (g) Interest on loan for reconstruction of HP1 paid outside India without deducting tax at source (h) interest on loan for reconstruction of HP2 payable outside India on which TDS has not been deducted and no payment yet been made 0 Interest on loan on mortgage of HP1 for renovation of HP2 5,000 20,000 20.000 10,000 Particulars Pre-construction period Post-construction period Starts from The day of commencement of construction or the first day of the previous year in which the day of borrowing, whichever is later construction is completed Ends on March 31 immediately prior to the year of When loan is fully paid completion of construction Tax treatment The Interest incurred during aforesaid period shall The interest expenses for the year (on accrua be accumulated and allowed as deduction in 5 basis) shall be allowed as deduction in the equal installments from the year of completion respective year. of construction f38 Other Points (a) Interest on borrowed capital is allowed on accrual basis even if the books of account are kept on cash basis (b) Interest paid on fresh loan, which is taken to repay the original loan (being taken for above mentioned purpose shall be allowed as deduction (c) Interest on new loan, taken for paying outstanding interest on old loan, is not deductible (d) Amount paid as brokerage or commission for arrangement of the loan, is not deductible (e) Interest on loan taken for payment of municipal tax, etc. is not allowed as deduction Amount not deductible from Income from house property (Sec. 25) Any interest chargeable under this Act which is payable outside India, is not allowed as deduction if on such interest, tax has not been deducted at source and paid as per the provision of chapter XVIIB; and in respect of such interest there is no person in India who may be treated as an agent u/s 163 . ILLUSTRATION 10 Following information are provided by an assessee for his house properties for computing interest on loan allowe u/s 24(b): Particulars HP3 HP4 HP5 HP1 20.000 HP2 30,000 10,000 25.000 15.000 17.000 20,000 25,000 30,000 18.000 10,000 12.000 13.000 14,000 16.000 10,000 10,000 10.000 10,000 10,000 2.000 2,000 2.000 2.000 2.000 (a) Interest on loan taken for repair of H.P. (b) Interest on loan taken for purchasing H.P. (50% paid) (c) Interest on new loan taken for repaying old loan which was taken for purchasing H.P. (d) Interest on loan taken for payment of interest on earlier loan (e) Interest on loan for payment of Municipal tax (0) Interest on loan by mortgaging HP3 for business purpose (g) Interest on loan for reconstruction of HP1 paid outside India without deducting tax at source (h) interest on loan for reconstruction of HP2 payable outside India on which TDS has not been deducted and no payment yet been made 0 Interest on loan on mortgage of HP1 for renovation of HP2 5,000 20,000 20.000 10,000