My daughter's CTC is Rs. 18 L approx. She wants to buy a vacant residential plot by availing a bank loan. House on this plot will be constructed at a future date and not immediately. Will she be able to avail income tax benefits on interest paid u/s 24 of the income tax act on repayment of loan/interest. She files her IT Return under old regime of tax.

Ans: Under the Income Tax Act, Section 24 allows for the deduction of interest on housing loans from the income chargeable under the head "Income from House Property." However, it is important to note that Section 24(b) of the Income Tax Act provides specific conditions for claiming the deduction on interest paid on a housing loan.

In the case of a vacant residential plot, where construction has not yet commenced, the interest paid on the loan would not be eligible for deduction under Section 24(b) of the Income Tax Act. The deduction for interest on housing loans can only be claimed if the loan is taken for the purpose of acquiring or constructing a house property. Since the loan is being taken for the purchase of a vacant plot, the construction of the house will happen at a future date, and the interest paid until then would not be eligible for the deduction.

Therefore, your daughter may not be able to avail income tax benefits on the interest paid on the loan for the vacant residential plot under Section 24 of the Income Tax Act.