CS Executive · Tax Laws and Practice · Deductions
Mr. Iyer owns a single self-occupied house property covered by section 21(6), acquired with a home loan taken in 2024-25 and completed within five years from the end of the tax year in which capital was borrowed. He holds the lender's interest certificate. Interest payable for the tax year is Rs. 2,60,000. What is the maximum deduction for interest under section 22?
The maximum deduction is Rs. 2,00,000. For a property referred to in section 21(6), section 22(2)(a) caps the interest deduction at Rs. 2,00,000 when construction is completed within five years and the lender's certificate is furnished. Interest above that is not allowed.
- ARs. 2,60,000
- BRs. 30,000
- CRs. 2,00,000Correct
- DRs. 60,000
Explanation
Under section 22(2)(a), where the conditions (completion within five years and the lender's certificate) are met, the aggregate interest deduction for such property is capped at Rs. 2,00,000. Rs. 30,000 applies in any other case, and the full Rs. 2,60,000 ignores the cap.
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