Amit Ingale (Student CA Final) (1454 Points)
09 March 2010
Amit Ingale
(Student CA Final)
(1454 Points)
Replied 09 March 2010
Also Provide provision of Bare act or the relevant rule in Support of your answer.
Amit Ingale
(Student CA Final)
(1454 Points)
Replied 09 March 2010
Section 23 :- Annual value how determined
(2) Where the property consists of a house or part of a house which
(a) is in the occupation of the owner for the purposes of his own residence; or
(b) cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him,
the annual value of such house or part of the house shall be taken to be nil.
:- Considering the non-fulfillment of provision of 23(2)b, is it correct to say that , such owned house shall be treated as deemed to be let out ?
and he shall be allowed , dedcution for interest on home loan as Deemed let let out property only ????
Praveen Sharma
(Chartered Accountant)
(2045 Points)
Replied 09 March 2010
If both the houses are in same city; then deduction cannot be claimed.
But if one house in diff. state & one in other state, then deduction can claim for both.
megha
(Working )
(71 Points)
Replied 09 March 2010
Amit in both the situation , u can claim the HRA and Interest on Home loan Simultaneously.
You must have a reasonable reason/difficulty in not staying in the owned house due to reason of your employment, business or profession carried on at any other place( doesnt mean a new city) , he has to reside at that other place in a building not belonging to him.
or the other way out is ( if there is no genuine hardship) then this can be done in the following way :
While claiming HRA as against the rented property , the property owned by you will be deemed to be let out as you are not staying over there under section 23
As the property will be deemed to be let out , Annual value of the property would be shown as income from that house property and claim interest on home loan( on actual payment basis) under the Head " Income from house property" .
Before going for this option, analyze the tax impact of claiming HRA and offering Annual value of the property as income and claiming interest on that house property.
As per me, the second option is the best .
C.Balaji
(Learner)
(1867 Points)
Replied 09 March 2010
Agree with Megha.........
In both situation u can claim HRA and Housing Loan deduction......
You need to prove the A.O. that some difficulty in staying in the own house............
Harish Arora
(Chartered Accountant)
(52 Points)
Replied 09 March 2010
If property is not let out but is self occupied and the person is also staying on rent in some other property due to his job or business then please refer the case below.....
The assessee owned a house in Karachi. The assessee was not residing in that property but she used to go there occasionally. The property was occupied by her married daughter and son-in-law, who were residing in Karachi. Even though the property was in actual occupation of her daughter and son-in-law, the evidence on record disclosed that she had retained the property for her personal occupation and she occasionally went and resided therein. This the Tribunal found on the basis of an endorsement made in her passports in the relevant years. It was, therefore, clear from the facts brought on record that the assessee visited Karachi at intervals and resided in the property along with her daughter and son-in-law. The court, therefore, came to the conclusion that she retained the house for her occupation while permitting her daughter and son-in-law to reside therein. In the background of these facts, the court came to the conclusion that she was entitled to the benefit under Section 23(2) of the I-T Act.
From this judgment, one can conclude that as long as you retain the right to occupy the owned premises and go and reside there occasionally (say on weekends or during vacations - also means the property is in a habitable condition) and can show some proof for that (electricity bills showing consumption in line with your stay period, letters received at that address during that period, bills for items bought by you from neighborhood shops/hotels during the stay, copies of telephone bills showing (STD) calls made from a fixed line phone from that premises during the period of stay, etc.); you should not face any difficulties in treating the annual value of such properties as nil.
Hence he can claim the HRA and the Interest Deduction simulteneously and it no where prohibited in the Income tax act to claim both the things simulteneously.
Sharad Suman Das
(art)
(141 Points)
Replied 09 March 2010
he can claim the HRA and the Interest Deduction simulteneously and it no where prohibited in the Income tax act to claim both the things simulteneously
Sharad Suman Das
(art)
(141 Points)
Replied 09 March 2010
the reson to my above answer is in refference to section10(13A) whreby the deduction in respect of HRA is allowed if the assessee is residing in rented house and in both the case the assessee is residing in rented house.
furthure in the income tax act 1961 it is nowhere mentioned that an assessee cannot claim deduction for HRA and deduction interest on loan for house simultaneuosly
Sharad Suman Das
(art)
(141 Points)
Replied 09 March 2010
vineet please reffer to section 10(13A) and 24B
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