House Property

This query is : Resolved

CA Sanil Joseph (Querist)
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24 June 2009 Hi,
A person has two houses one is let out for the whole year and the other one was self occupied for 11 months and the 12th month it was let out. In such a case can i treat both the houses as let out and claim interest more than Rs. 150000 for both houses.

Thanks in advance

chetan soni

chetan soni (Expert)
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24 June 2009 Interest on housing loan is allowed to allow u/s 24(b). For this deduction the house should be self occupied.

As in your case the one property was self occupied for 11 months. so you can claim only for 11 months for the self occupied property.

Vipul J. Bhavsar

Vipul J. Bhavsar (Expert)
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24 June 2009 I agree with Chetan.The deduction in respect the self occupied house property can be claimed only for the 11 months and upto Rs.1,50,000.

Jitendra

Jitendra (Expert)
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24 June 2009 Yes, you have to consider both the properties as let out only & can claim deduction of interest at full; even more than Rs. 1.5 Lakhs if actual interest payable exceeds Rs. 1.5 Lakhs. However you have to take GAV for full year as per market rate or any other annual value as per sub section (1) of section 23.

Read sub-section (3) of section 23…

“
The provision of sub-section (2) shall not apply if-

(a) The house or part of the house is actually let during the whole or any part of the previous year; or

(b) Any other benefit there from is derived by the owner.

“

Since in your case one property was let for whole year and other property was let for one month (part of the previous year), it is deemed to be let for whole year i.e. you can not claim it as SOP u/ss (2) of 23.

There is no limit on deduction of interest on loan taken for let out property. & so in my opinion you can take 100% deduction of actual interest payable during the year even if it exceeds Rs. 1.5 Lakhs.

However please take experts opinion.

Note: Sub section 2 of section 23 is on self occupied properties.

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CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)
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24 June 2009 both house should be considered as let out i agree with jitendra

Ratan Sharma

Ratan Sharma (Expert)
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25 June 2009 I agreed with chetan. Both the houses can not be considered as self occupied . You can claim interest for 11 months only upto Rs. 150000/-.

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