I have taken a home loan and bought a 2 storey building. I am paying Interesest of 4,50,000
I have rented out ground floor and i stay in the first floor.
I get a rent of 1,00,000 from the ground floor.
How should i file income tax returns? should i treat it as a rented house and claim full deduction of 4.5L or do i need to claim in some ratio ( as i occupy 50% of it) ?
Please advise.
On the basis of the proportion (50%)
Whole rupees 2,25,000 will be allowed to be deducted for rented portion. (no limit on interest)
For self occupied out of 2,25,000 , 150,000 can also be claimed. (limit is 1,50,000 for house or PART of house)
For Self Occupied how much interest we can claim?
I thought it is 1.5L? Is it 3.5L?
It was a typo . 1.5 L
For self occupied property Treatment is
In rupees
Net annual value = Nil (u/s 23(2)(a))
Less interest = 150,000 (u/s 24)
(Loss) from self occupied property = (150,000)
Principle payment can be availed as deduction u/s 80c (max 100,000 in 80c,80ccd,80ccc in aggeregate or individually)
For let out (assuming no composite rent and also assuming that letting out is not supplementarty to b/s)
Gross annual value u/s 23(1)(a) / 23(1)(b) / 23(1)(c) (as the case maybe)
Less taxes PAID
Balancing figure = Net annual value
Less 30% of NET ANNUAL VALUE (u/s 24)
Less intrest (u/s 24) 225,000
Balancing figure = Profit/(loss) from the let out property.
In case there is profit in let out property then you can adjust to the extent of 150,000 (i.e loss of self occupied proprty)
Profit/(Loss) from both the properties taken together shall be income u/h Income from house property.
Further if theres any LOSS under head of house property then it can be setoff/adjusted against any other income.
CAclubindia
