Exemption of interest on housing loan.

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LATHA RAMESH (Querist)

23 January 2008 Dear Experts,
Please clarify my following doubt.
There is a limit on interest on housing loan to the extent of Rs.150000. Is this aplicable only for the self occupied property?
I mean to ask if a person has letout a property for Rs.15000 and has paid the interest on house property Rs.600000 during a previous year, how much deduction he will get?
Hope I am clear in my question.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

23 January 2008 The maximum cap of 150000 is in respect of property referred to in subsection (2) of section 23, that is a house or part of a house in the occupation of owner for his own residence or can not be occupied by the owner owing to employment elsewhere.

But the moment he lets out the property or part of the house property then the provisions of subsection (2) of section 23 will not apply and annual value has to be determined in accordance with section23(1).

Then deductions are applied to the income so determined as per section 24, which include interest on borrowed capital. If the resultant is a loss provisions of section 71 can be made use of.

Ravikumar.G

Ravikumar.G (Expert)

24 September 2008 The limit of Rs.150K is applicable only for self occupied property. In case of let out property whatever paid can be claimed as deduction in the same PY. Hence in this case you can claim the entire 6 lacs.

Ravikumar.G

Ravikumar.G (Expert)

24 September 2008 Housing loan principal repayment can be claimed as deduction u/s 80C.This deduction is available only for self occupied property and not for let out.

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