Declaring Property Purchase in ITR Filing

Ask the Community Income Tax
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Can anyone help if we need to disclose the plot purchased in ITR? And can home loan interest be exempted from income tax if purchased property is a plot?

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Hi @DeeptiM , If you’ve purchased a plot of land, you may need to disclose it in your Income Tax Return (ITR) under the “Income from Capital Gains” head, depending on whether you’ve sold the plot or not. If you’ve sold the plot, you’ll need to disclose the details of the sale, including the sale price, date of sale, and cost of acquisition.

Regarding the home loan interest exemption, yes, you can claim an exemption for the interest paid on a home loan if you’ve purchased a plot of land for construction of a house. This exemption is available under Section 24 of the Income Tax Act, 1961, and is capped at ₹2 lakhs (₨200,000) per financial year.

However, to claim this exemption, the following conditions must be met:

  1. The loan must be taken for the purpose of purchase, construction, repair, or renovation of a residential house property.
  2. The property must be completed within 5 years from the end of the financial year in which the loan was taken.
  3. You must be the owner of the property and the loan must be taken in your name.

Hope this will help you or you have any query - Please ask me.

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the interst on the land loan is eligible to claim in ITR or not ?

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Hi Agnel,

As explained by Vikash in the earlier post, the interest is eligible to claim subject to certain conditions.

As per Income Tax Act, under section 24 Deductions from income from house property

24. Income charge­able under the head “Income from house property” shall be comput­ed after making the following deductions, namely:—

(a) a sum equal to thirty per cent of the annual value;

(b) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital:

Provided that in respect of property referred to in Section 23 (2) of the Income tax, the amount of deduction or, as the case may be, the aggregate of the amount of deduction shall not exceed thirty thousand rupees :

Provided further that where the property referred to in the first proviso is acquired or constructed with capital borrowed on or after the 1st day of April, 1999 and such acquisition or con­struction is completed within five years from the end of the financial year in which capital was borrowed, the amount of deduction or, as the case may be, the aggregate of the amounts of deduction under this clause shall not exceed two lakh rupees.

Explanation.*—*Where the property has been acquired or construct­ed with borrowed capital, the interest, if any, payable on such capital borrowed for the period prior to the previous year in which the property has been acquired or constructed, as reduced by any part thereof allowed as deduction under any other provi­sion of this Act, shall be deducted under this clause in equal instalments for the said previous year and for each of the four immediately succeeding previous years:

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.

Explanation.*—*For the purposes of this proviso, the expression “new loan” means the whole or any part of a loan taken by the assessee subsequent to the capital borrowed, for the purpose of repayment of such capital:

Provided also that the aggregate of the amounts of deduction under the first and second provisos shall not exceed two lakh rupees.

Regards,
Bhuvana Anand

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