Two Joint property in joint names, deemed let out

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Ashish vig (Querist)
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04 January 2011 Suppose I have purchased a property in joint name with my wife in Delhi, and presently we are working in Mumbai, and paying rent of house taken in Mumbai. Our Delhi house is let out. Now if we purchase a new house in Mumbai in our joint names. Can we both show in our Return of Income Tax one house as self occupied, and claim benefit of Self occupied house. Or do we need to pay tax on the basis of Deemed let out property. The source of finance of house in Delhi is self money out of savings, loan from relative and BANK LOAN. The new house to be purchased in Mumbai will be financed by self savings and BANK LOAN.

Please give your expert opinion. Can we consider both the house as SELF occupied, and not to pay any tax as deemed let out.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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05 January 2011 In case of co-owners the same house will have two shares belonging to each co-owner.
Presently your House at Delhi is a let out property. If it will remain as let out, then you have to show its income as you might be showing presently.

Means if you have actually let out the property, in any case, you can not treat it as self occupied.

In the present situation, you can treat property at Delhi as self occupied, if you were not getting rent or any other benefit.

Now if you purchase a house at Mumbai, then you will be residing in a house belonging to you. As per Section 23(2)(b) your Delhi property can not be treated as self occupied even if , it's not let out.

Hence you both will be able to claim only Mumbai-Property as Self Occupied.

Ashish vig

Ashish vig (Querist)
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09 January 2011 thanks sir, reply is very much helpful.

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