I own 2 Flats (Apartments) in Bengaluru for which I have taken home loans and both of them are rented out. Due to my work, I live in Bengaluru in a rented flat. I know that I can claim HRA exemption for the rent I am paying in Hyderabad. I also know that I can claim interest on home loans as tax benefit. 2 Questions in this regard
1. In case of 1 home loan (the home which I had lived in for 5 years and can be considered as Self-Occupied), the interest on the home loan is anyhow less than 1.5 lakhs per annum. Now, I am earning rent amount on this. Should I compute the income from house property with the Gross Annual Value = to Rent Amount and claim Municipal Taxes and Maintenance benifit?
2. My company's payroll system does not consider Income from House Property. However, it does consider 2 line items of Interest on Home Loan for deduction with the 1st line item allowing a maximum of 1.5 lakhs and 2nd unlimited. In this case, if I compute the income from house property on 1st house considering the rent amount, I end up having more income and thus needing to pay tax. On the 2nd house, I end up getting tax exemption. Now, can I sum both the results and give 1 amount to my company stating it to be Interest on Home Loan and give a statement of both the computations (as below table) to my company? Is there any better way for my company to consider the same so that I do not end up in claiming a tax refund?
Income from HP Computation | Self-Occupied | Let Out |
Gross Annual Value | Rs.275,000 | Rs.156,000 |
Less: Municipal Taxes | Rs.4,439 | Rs.5,575 |
Net Adjusted Annual Value | Rs.270,561 | Rs.150,425 |
Less: Deduction under Sec 24 | Rs.81,168 | Rs.45,128 |
Net Annual Value | Rs.189,393 | Rs.105,298 |
Less: Interest on Borrowed Capital | Rs.112,133 | Rs.304,407 |
Total Deduction | Rs.77,260 | (Rs.199,110) |