Income tax query

This query is : Resolved

Vimal (Querist)
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23 April 2012 I reside and work in chennai in a rented property - Rs.10,000 pm, but recently constructed a house in kerala. I pay EMI of Rs.12,000 for the loan that I availed. No body resides in the property in kerala and I just visit it once in a month or so.

In tax computation sheet that my company sent they asked If i own a House property and if yes what is the rental income. Though i own it, I reside else where and also pay rent and have not let out my property. How do i handle this and what is the tax implication?

Please help.. you may also sent the response to kind.kool@gmail.com

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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23 April 2012 You can claim the property as your self occupied property U/s 23(2)(b) and its net annual value can be taken at NIL.

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Vimal

Vimal (Querist)
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24 April 2012 Thanks Paras but in that case will i also be able to claim the HRA deduction as am paying the rent of rs.10,000 per month? Also Can I claim the benefits of the principal and interest that I pay for my home loan?

Your response is much appreciated!

Regards,
Vimal

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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24 April 2012 You will be able to claim certain exemption towards rent paid if your company gives you HRA. Entire amount of Rs. 10000/- payable by you towards rent will not be exempt. However it will be based on the least of the 3 criteria-
1. 50% of Salary (Basic +DA in terms)
2. Rent paid i.e. 10000- 10% of Salary
3. HRA received.
.
In any case you have to bear tax liability on at least 10% of your Salary.
.
You will get Deduction U/s 80C as well as U/s 24 for your owned home.

Vimal

Vimal (Querist)
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25 April 2012 Thanks very much, much appreciated!

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