Interest on interest paid due to default in payment of home loan instalments is not deductible under section 24.
The High Court held in favour of revenue as under:
1) Income of the assessee under the head "income from house property" is to be computed for the purpose of income tax after making certain deductions as are envisaged in Section 24;
2) Section 24(b) stipulates that amount of interest payable on capital borrowed, inter alia, for construction of the property yielding income, is an admissible deduction;
3) It thus is evident that only interest payable on such borrowed capital is to be deducted while computing income chargeable to income tax under the head "income from house property";
4) Therefore, interest paid on interest levied by the bank, because of non-payment of instalments of borrowed capital to the bank, does not qualify for an admissible deduction - Master Naman Kumar v. CIT [2014] 41 taxmann.com 10 (Punjab & Haryana)
The High Court held in favour of revenue as under:
1) Income of the assessee under the head "income from house property" is to be computed for the purpose of income tax after making certain deductions as are envisaged in Section 24;
2) Section 24(b) stipulates that amount of interest payable on capital borrowed, inter alia, for construction of the property yielding income, is an admissible deduction;
3) It thus is evident that only interest payable on such borrowed capital is to be deducted while computing income chargeable to income tax under the head "income from house property";
4) Therefore, interest paid on interest levied by the bank, because of non-payment of instalments of borrowed capital to the bank, does not qualify for an admissible deduction - Master Naman Kumar v. CIT [2014] 41 taxmann.com 10 (Punjab & Haryana)
No comments:
Post a Comment