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circular 3.6.1

ashish tripathi (22 Points)

06 March 2019

sir please explain the circular 3.6.1 of income tax act how is applicable in house loan.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (193888 Points)
Replied 06 March 2019

3.6 Computation of income under the head “ Income from house property‖:
While taking into account the loss from House Property, the DDO shall ensure that the employee files the declaration referred to above and encloses therewith a computation of such loss from house property. Following details shall be obtained and kept by the employer in respect of loss claimed under the head ― Income from house property‖ separately for each house property:
a) Gross annual rent/value
b) Municipal Taxes paid, if any
c) Deduction claimed for interest paid, if any
d) Other deductions claimed
e) Address of the property
The DDO shall also ensure furnishing of the evidence or particulars in Form No. 12BB in respect of deduction of interest as specified in Rule 26C read with section 192 (2D).
3.6.1 Conditions for Claim of Deduction of Interest on Borrowed Capital for Computation of Income From House Property [Section 24(b)]:
Section 24(b) of the Act allows deduction from income from houses property on interest on borrowed capital as under:-
(i) the deduction is allowed only in case of house property which is owned and is in the occupation of the employee for his own residence. However, if it is actually not occupied by the employee in view of his place of the employment being at other place, his residence in that other place should not be in a building belonging to him.
(ii) the quantum of deduction allowed as per table below:
Sl No
Purpose of borrowing capital
Date of borrowing capital
Maximum Deduction allowable
1 Repair or renewal or reconstruction of the house Any time Rs. 30,000/-
2 Acquisition or construction of the house Before 01.04.1999 Rs. 30,000/-
3 Acquisition or construction of the house On or after 01.04.1999 Rs. 1,50,000/- (upto AY 2014-15)

Rs. 2,00,000/- (w. e. f. AY 2015-16)
6 In case of Serial No. 3 above
(a) The acquisition or construction of the house should be completed within 5 years from the end of the FY in which the capital was borrowed. Hence, it is necessary for the DDO to have the completion certificate of the house property against which deduction is claimed either from the builder or through self-declaration from the employee.
(b) Further any prior period interest for the FYs upto the FY in which the property was acquired or constructed (as reduced by any part of interest allowed as deduction under any other section of the Act) shall be deducted in equal installments for the FY in question and subsequent four FYs.
(c) The employee has to furnish before the DDO a certificate from the person to whom any interest is payable on the borrowed capital specifying the amount of interest payable. In case a new loan is taken to repay the earlier loan, then the certificate should also show the details of Principal and Interest of the loan so repaid.
As discussed in para 4.6.5 section 192(2D) read with rule 26C makes it mandatory for the DDO to obtain following details/evidences in respect of Interest deductible.
(i) Interest payable or paid
(ii)Name of the lender
(iii) Address of the lender
(iv) PAN of the lender
PAN of the lender being financial institution or employer, is mandatory if it is available with the employee however in case of other lender obtaining of PAN is mandatory by the DDO.

The whole declaration in itself is self explanatory.

What exact point you require to understand?

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ashish tripathi (22 Points)
Replied 06 March 2019

thank you very much
one think i wnt to get that husband and wife took home loan jointly and interest is deducted by husband account than what ll be the quantum of and maximum deduction for both husband and wife separately.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (193888 Points)
Replied 06 March 2019

Both can get deduction provided both are co-owner of property and loan co-borrower, but condition is wife has to pay her share of EMI directly or through her husband's account. Otherwise only husband will be entitled to claim the deduction.

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