Hi,

In short “Yes”

Real Estate is on the boom and involved huge costs. Attractive marketing schemes make it more lucrative.  Generally, People buy a house with the help of a bank loan and pays interest on that home loan.

Repayment of Principal is allowed as deduction under section 80C and Portion of such Interest can be claimed as deduction under section 24(b) while calculating Income from the house property.

Now see the twist:

Interest paid on a housing loan can be considered in the acquisition cost of a house while calculating capital gain under section 48.

Section 48 of Income Tax says that

The income chargeable under the head “Capital gains” shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely:—

(i) expenditure incurred wholly and exclusively in connection with such transfer;

(ii) the cost of acquisition of the asset and the cost of any improvement thereto:

The case of CIT vs. C. Ramabrahmam (2013) also supports this claim.

So, Interest paid on a house loan can be claimed at both the income head, House Property, and Capital Gain.