Principal Amount of Loan Allowed Even If Interest Is Not Allowed!

Suppose, somebody is taking exemption on rent can he also be eligible on Housing Principal & Interest benefit? rajendra.panditrao@.................com

Yes, the deduction u/ s 24 of the I T Act of Interest on borrowed fund for construction of house

1. which is self occupied or

2. for the reason that the owing to your employment , you could not occupy.

3. or the house is put on rent.

In all these cases , you are allowed to have interest deduction. So if you are residing in the same city and paying Rent and having a house without living in it, A.O may read the provision of the I T Act literally and may not allow the Interest paid on borrowed fund.

However, principal amount on the repayment of loan shall be allowed in any case. The only requirement that the loan should be taken for construction of house.