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Two self occupied house in differnt cities - how to deal wit

Kapil (Manager) (34 Points)

19 March 2012

I work with a MNC in Kolkata. I am currently living on rent of Rs. 12,000/-. My current salary is around Rs. 20, 00,000/- per year.

I have to two houses purchased on loan, details of which are given below:

House A

Purchased in June 2002 in Delhi

Loan from IDBI (Rs. 600,000/-). Outstanding balance as on 29.02.2012, Rs. 98,000/-

For Financial Year 2012 -12, interest on house loan will be around Rs. 20,000/- and principal Rs. 30,000/-

Currently used by Parents for living.

I have been showing this house as “self occupied” and have been claiming deduction for interest on housing loan U/S 24 and repayment of principal U/S 80C till date.

Recently I have purchase another house on loan.

House B

Recently purchased a house in March 2012 in Kolkata.

Loan taken from Axis Bank (Rs. 50, 00,000/-) as on 1^st March 2012

For Financial Year 2012 -12, interest on house loan will be around Rs. 535,000/- and principal Rs. 75,000/-

Intend to use this for self occupation

Please can you guide me how I can use the provisions of income tax Act to get maximum tax benefit under the law for FY 2012-13.

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student (WORKING) (757 Points)
Replied 19 March 2012

U CAN ONLY SHOW 1 HOSE AS SO/PIED & OTHER WIL BE TREATED AS DEEMED LET OUT & INTEREST CAN BE CLAIMED AS A DEDUCTION U/S 24 (MAX -150000 IN CASE OF S/PIED & NO LIMIT IN CASE OF DEEMED LET OUT)

FOR PRINCIPAL AMT U WIL GET DED U/S 80 C for both if loan is taken for purchase/construction.its better to show 2nd one as self occupied .if u hv any queries cal me at 7566745985

sec 80 C :for the purposes of purchase or construction of a residential house
property the income from which is chargeable to tax under the
head “Income from house property” (or which would, if it had not
been used for the assessee’s own residence, have been chargeable to
tax under that head), where such payments are made towards or by
way of—
(a) any instalment or part payment of the amount due under any selffinancing
or other scheme of any development authority, housing
board or other authority engaged in the construction and sale of
house property on ownership basis; or
(b) any instalment or part payment of the amount due to any
company or co-operative society of which the assessee is a
shareholder or member towards the cost of the house property
allotted to him; or
S. 80C I.T. ACT, 1961 1.384
22. Substituted for “notified under” by the Finance Act, 2006, w.e.f. 1-4-2007.
23. For notified Pension Fund, see Taxmann’s Master Guide to Income-tax Act.
24. For notified Deposit Scheme, see Taxmann’s Master Guide to Income-tax Act.
(c) repayment of the amount borrowed by the assessee from—
(1) the Central Government or any State Government, or
(2) any bank, including a co-operative bank, or
(3) the Life Insurance Corporation, or
(4) the National Housing Bank, or
(5) any public company formed and registered in India with the
main object of carrying on the business of providing longterm
finance for construction or purchase of houses in India
for residential purposes which is eligible for deduction under
clause (viii) of sub-section (1) of section 36, or
(6) any company in which the public are substantially interested
or any co-operative society, where such company or cooperative
society is engaged in the business of financing the
construction of houses, or
(7) the assessee’s employer where such employer is an authority
or a board or a corporation or any other body established or
constituted under a Central or State Act, or
(8) the assessee’s employer where such employer is a public
company or a public sector company or a university established
by law or a college affiliated to such university or a
local authority or a co-operative society; or
(d) stamp duty, registration fee and other expenses for the purpose
of transfer of such house property to the assessee,
but shall not include any payment towards or by way of—
(A) the admission fee, cost of share and initial deposit which a
shareholder of a company or a member of a co-operative society
has to pay for becoming such shareholder or member; or
(B) the cost of any addition or alteration to, or renovation or repair of,
the house property which is carried out after the issue of the
completion certificate in respect of the house property by the
authority competent to issue such certificate or after the house
property or any part thereof has either been occupied by the
assessee or any other person on his behalf or been let out; or
(C) any expenditure in respect of which deduction is allowable under
the provisions of section 24;
(xix) as subscripttion to equity shares or debentures forming part of any
eligible issue of capital approved by the Board on an application made
by a public company or as subscripttion to any eligible issue of capital
by any public financial institution in the prescribed form25.
Explanation.—For the purposes of this clause,—
(i) “eligible issue of capital” means an issue made by a public
company formed and registered in India or a public financial
1.385

vaibhav (student) (220 Points)
Replied 19 March 2012

Treat both self ocupd then see wt income u get frm hous property. Treat both let ot then see the income. And then u try combinations hous1 s.o.p wt hous2 let out. And v. Versa. . Try it

Roshan A (Chartered Accountant) (458 Points)
Replied 19 March 2012

I think you should show second house as self occupied.

Rajasekar (accounts) (122 Points)
Replied 19 March 2012

PLEASE FIND THE ATTACHMENT FOR EXAMPLE OF HOUSE LOAN INTEREST FOR MORE THAN ONE PROPERTY

REGARDS,

RAJASEKAR

Attached File : 510830 950918 house loan interest for more than one property.pdf downloaded: 341 times

Kapil (Manager) (34 Points)
Replied 19 March 2012

Hello All

thank you for your responses.

I think i should treat house A as self occupied because the limit of interest deduction on housing loan on 'self occupied property' is capped to 150,000/-. And if i treat house B as self occupied, I will be getting deduction of only 150,000/- whereas the interest outflow is around Rs. 535,000/-

Please confirm that this is correct understanding.

Also, House A is situated in Delhi and house B in Kolkata (where I am employed). Will it create any problem under the income tax Act to treat house A as self occupied since it is not actually situted at the place of employement?

thank you once again.

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