Section 24(b) of the Act allows deduction from income from houses property on interest on borrowed capital as under:-
(i) the deduction is allowed only in case of house property which is owned and is in the occupation of the employee for his own residence.However, if it is actually not occupied by the Assessee in view of his place of the employment being at other place, his residence in that other place should not be in a building belonging to him.
(ii) The quantum of deduction allowed as per table below:
|Purpose of borrowing capital|
Date of borrowing
|Repair or renewal or reconstruction of the|
|Any time||Rs. 30,000/-|
|Acquisition or construction of the house||Before 01.04.1999||Rs. 30,000/-|
|Acquisition or construction of the house||On or after 01.04.1999||Rs. 1,50,000/- (Rs. 1.50 Lakh Up to A.Y. 2014-15)|
In case of Serial No. 3 above
(b) Further any prior period interest for the FYs upto the FY in which the property was acquired and constructed shall be deducted in equal installments for the FY in question and subsequent four FYs.
(c) The Assessee has to acquire before a certificate from the person to whom any interest is payable on the borrowed capital specifying the amount of interest payable. In case a new loan is taken to repay the earlier loan, then the certificate should also show the details of Principal and Interest of the loan so repaid.
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(Republished with Amendments)