Help with Income for House Property Computation

Q No 1 - Ans - As you are a co-owner, you have to show your share of income.

Q No. 2- This property is already constructed, and to be safer, it is advised that  this is to be treated as your self occupied property . ( Section 23(2)(b) is well supported by  your query No 4) . 

DEDUCTION FOR iNTEREST 1.5 LACS. 

( To claim more deduction for interest,  deciding notional rent may become subjective and invite litigation)

Q No.3 : No deduction in respect of Interest till the completion of construction. Accumulated Interest can be claimed in 5 instalments after competion.

Q No 4- Yes

Thanks Mr.Bafna

Pls find some clarifications from my end to the above.

1. I have given the POA for property1 to my father and the rent is issued in his name. So am I still liable to pay tax under my name on any part of this rental income that I have not recieved ??

2. I would definitely like to deduct for the interest I am paying, so notional rent is what I would prefer. How does one arrive normally at this value ?? Or can I say that its let out to my close relative and quote a lower rent.

3. Just to re-iterate, the finance taken here is from LAP of another property, so as such there is no loan on the bought property. So want to confirm if the interest can be claimed as loss for bought property. And also since registration is completed, isnt that enough for claiming the interest deduction right away ?? Do i need to wait for construction to be completed or possession to be recieved.

Q No 1 Ans - As you are a co-owner, you have to show your share of income.

Without transferring the property, transfer of Income will attract clubbing provisions -Section 60.

  Reply to Q NO 2   - This property is already constructed, and to be safer, it is advised that  this is to be treated as your self occupied property . ( Section 23(2)(b) is well supported by  your query No 4) . 

DEDUCTION FOR iNTEREST 1.5 LACS. 

( To claim more deduction for interest,  deciding notional rent may become subjective and invite litigation)

Letting out at Nominal or concessional rent to relative will not be your- Deemed Let Out Income. Full Value of Rent as Prevailing of Similar Property in the locality  will be deemed as Rental Income. 

Opinion of ITO may differ. Pl reconsider before taking any brave step. 

.The finance taken here is from LAP of another property, so as such there is no loan on the bought property.

It is not necessary that the same property should be mortgaged. 

It is sufficient if you can prove that the loan has taken for the said purpose.  So if you obtain a certificate specifying the purpose and amount of Interest -it will fulfill the requirement of Section 24- Pl Refer Explanation  and Proviso to it  in  Section 24.

In my opinion you have to wait till the construction is completed. 

The word acquired or construction has been used in the law. Here "acquired" is used in reference to the Property already constructed as I understood from going through the section. 

I have joint Flat with my Father. We also have joint Home loan. Now My father does not live with me so I am occupying it fully. Can I claim HRA on rent to my father and at the same time claim loan interest benefit on home loan. Also, can my father claim interest benefit if he pays Annual rent - 30% as interest on home loan.

Father is co-owner with you. For using his share in the property , you can pay rent to him. Interest is allowable to both. You can claim interest upto 150000/- for  your portion which is self occupied and your  father can claim full amount of interest for the let out portion to you. However you can not claim total loan interest  as interest payable by father has to be excluded as I mentioned above, in the given situation.  

The rent will be shown by your father and 30% deduction and interest is allowable to him.