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Income from House Property

CA Rahul Ranjan (Proprietor) (119 Points)

03 November 2009

Mr. A has a house which is let out for Rs. 5000/- per month & A has not any other house property, the employer has given a house to Mr. A as rent free accomodation. How will valued house of Mr. A which is let out. As a let out house property or self occupied house property ?, because the interest is Rs. 2,55,000 (after 01.04.1999) u/s 24(b).

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7 Replies

triumph-CMA (Chartered Accountant) (503 Points)
Replied 03 November 2009

It is let out. Benefit of section 23(2)(b) is available only when the owner is not able to occupy his house due to the reasons of employment or business. But the houuse must not be put to any other use. Since in this case the house is let out , Therefore the benefit can not be claimed and house will be treated as LET OUT.

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CA Rahul Ranjan (Proprietor) (119 Points)
Replied 03 November 2009

Originally posted by :CA Dhirendra Singh
"	It is let out. Benefit of section 23(2)(b) is available only when the owner is not able to occupy his house due to the reasons of employment or business. But the houuse must not be put to any other use. Since in this case the house is let out , Therefore the benefit can not be claimed and house will be treated as LET OUT.	"

So, we can not claim for Interest, Right ?

CA SUDHAKAR (CHARTERED ACCOUNTANT) (189 Points)
Replied 03 November 2009

As the house is let out, you have to declare the rent under "Income from House property" and it is more beneficial. If it is let out, total loss to be shown under the head income from house property will be like this:

Annual Rental Rs. 60000

Less: Municipal tax (if any) 0

Annual Rental Value Rs. 60000

Less :Standard Deduction @ 30% Rs. 18000

Intersst on Borrowings Rs. 255000

Loss under House property (-) Rs. 213000

As the house is let out, interest is fully deductible without any limit.

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saranraj (CA FINAL) (419 Points)
Replied 03 November 2009

Agree with Mr. Sudhakar Shetty V.K

Kiran Bhat K (Student) (87 Points)
Replied 04 November 2009

The house is let out for a rent.

It cannot be treated as self occupied because the house of Mr. A is not used for his self occupancy.

Hence, Deduction u/s 24(a) and 24(b) is allowed.

I Agree with CA. Sudhakar Shetty's valuation.

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Sunil (Trader) (2611 Points)
Replied 04 November 2009

The House is Let Out property & Taxed as Income from HP.

Accomodation given by company to Mr. A is taxable as perquisite and rules apply for provision of accomodation by company.

CA Rahul Ranjan (Proprietor) (119 Points)
Replied 04 November 2009

Thanks for your comment Sir,

Originally posted by :Sudhakar Shetty V. K.
"	As the house is let out, you have to declare the rent under "Income from House property" and it is more beneficial. If it is let out, total loss to be shown under the head income from house property will be like this: Annual Rental Rs. 60000 Less: Municipal tax (if any) 0 Annual Rental Value Rs. 60000 Less :Standard Deduction @ 30% Rs. 18000 Intersst on Borrowings Rs. 255000 Loss under House property (-) Rs. 213000 As the house is let out, interest is fully deductible without any limit.	"