tax rebate + hra benefit

Hi,

Suppose someone is working in delhi and claiming rebate by producing rent receipt. Now if the person buy a flat in noida. Can it be declared as second house? What will be the implecations ? My understanding is that rent/notional rent of flat in noida has to be shown and complete interest on home loan can be claimed at tax rebate. Am I right?

Now if HRA rebate + complete interest is more than the tax liability then what is to be done?

Sudeep

If you took a home loan for a home in one city but reside in another you will be entitled to:

• Tax benefit on Principal repayment under Section 80C
• Tax benefit on Interest payment under Section 24
• HRA benefit 10(13 A)

The other one bought at Noida would not be considered as second House as it is in other city.

It is required to know whether someone of your family is belonging to at that flat or not.

If it is rented out then the rent is taxable.

I agree with Mr.Chintan Vyas 

but, i dont understand why Mr Sudeep is talking about notional rent of flat in noida?

Thanks & Regards

Ram.

I think i didnt made scenerio clear. I am staying on rent in Delhi and I have bought flat in Noida taking home loan. Now the interest amount on home loan is app 4 lacs. So I understand I can claim for tax rebate (HRA benefit) by producing rent receipt. But for noida flat, will I get tax benefit of 1.5 lacs or 4 lacs?

You could claim interest on paid basis see if you paid 1lac interest on loan than you can take deduction of it and all remaining interest which you have to pay you could take deduction of it in subsequent year. And you can also claim HRA.

I have to pay interest of about 4 lacs.

As the Noida house is a let out property you are allowed to claim the entire interest portion paid during the year as rebate & the principal repayment can be claimed as a deduction u/s 80C.

Thanks & Regards

Ram.

Thanks for quick responses.

In that case I can claim interest on entire 4 lacs.  In case that makes my net tax liability negative, what to do?

Also In case I am not able to find tenant for the noida flat ?

You can take deduction of interest on paid basis but if your tax liability goes negative it does not mean that its refundable amount.