House property

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vidha (Querist)
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16 March 2013 If a house is partly let out and partly self occupied and the interest on borrowed capital is Rs. 230000/-. can we claim deduction of whole Rs. 230000 as there is no limit on let out property or Rs 150000 limit has to be followed..??? please guide if my view is correct or not....?? if it can be so then isnt it a great tax planning to claim whole interest...???

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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16 March 2013 A request to all assessees :

Before deciding to go for tax planning; think as if you are an ITO.
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Would you allow the above claim in full?

I hope now the issue is clear.

Santosh Mishra

Santosh Mishra (Expert)
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17 March 2013 The area which is occupied by assessee would be treated as self-occupied and annual value would be taken as NIL. House loan interest deduction is given in proportion of area used for self-occupation, with the limit of 150,000. suppose in your case, 2/3rd of the area is self occupied then interest exemption would restricted to 150,000 (230000*2/3=153,333 but restricted to 1.5 k)

Annual value of balance let out area would be determined as per the IT provisions, interest exemption in above example is 76,666 ( 230,000*1/3).

So total of interest exemption is 226,666 and not 230000.

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