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Q. > Please Help: Deduction u/s 24(b) & 80C
8 people have formed a cooperative society for constructing a building on a plot of land. idividual members are not applying for individual loans. the society is obtaining loan from cooperative bank for the entire construction. it is understood that the EMIS shallbe paid by society after collecting equal/proportionate amounts from individual members.
normally for obtaining home loan an individual is eligible to get deduction under 80c for the amount repaid [principal] and again incometax deduction u/s 24(b) upto RS 150000 towards interest charged in the home loan account.
in the instant case how can the individual members /allottees can derive the above benefits under incometax Act.
answered Jul 12, 2011 by CA. Sachin Data , Alwar
Can you please elaborate that what is going to be constructed on that land and for whom?
answered May 30, 2013 by Vikash Kumar Jha , Cuttack
Deduction claimable to cooparative society not to individual members.
Experts Panelist
Comments
CA VIPIN GARG
12-Jul-2011 , 09:09:21 amDear Vishal, In the above case the individual members can not claim any deduction i.e 80c or 24(b) in respect of repayment of above loan. The reason behind that is the loan is in the name of co-operative society only and co-operative society is considered a seperate assessee under the IT Act. When you prepare the income statement of Co-operative society you can claim the interest as an expense. Hope you will find your answer my dear, have a nice day vishal and i will feel bright in ansewering your further query, if any.
Vishal Gupta
12-Jul-2011 , 03:19:48 pmVishal Gupta
12-Jul-2011 , 03:26:05 pmDear Sir, Thanks for the quick reply. as per under section 80C Note No. 9 (b) following payments made towards the cost of purchase/construction of a new residential house property is qualified for the purpose of section 80C : Any installment or part payment of amount due to any company or co-operative society of which the assessee is a shareholder or member towards cost of house property alloted to him. If we relate it to this case can we avail the benefit of 80C. for members.
CA VIPIN GARG
12-Jul-2011 , 04:42:39 pmNo because it is for the payment when it is specifically made to the CO-Operative society towards the payment of housing loan which is constructed or alloted specifically to the particular member. But as per understanding of your case, I don't think so that you have constructed the house property to allot to some particular member or members. Hopefully this time you got the answer my dear but if you still have some further query then plsssssssssssssss ask againnn