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House rent

Kishor (Others) (53 Points)

08 November 2012

Hello Friends,

my case is :

i stay with my parents and so i give rent to my parents as house is owned by them. and i claim HRA exemption for that.

second i have bought one house in some other city on housing loan and i want to claim interest & principal deduction agianst it.

my question is, this house what status would IT dept considered.....i mean whether it would be considered empty or let out. it let out then i have to show its rent also.

please guide me. at present the house is under my posession and is empty.

regards,

Kishor.

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13 Replies

ANJALI NEGI (Chartered Accountant) (1263 Points)
Replied 08 November 2012

You may refer to the link below-

/experts/house-property-1141264.asp#.UJtiN8XMh48

1 Like

Saket Sinha (Student) (129 Points)
Replied 08 November 2012

Yes, definately you can claim interst deduction under sec 24 and pricipal repayment under sec 80C. on such property. In case of urs show ur house as deemed to be let out .

1 Like

Kishor (Others) (53 Points)
Replied 19 November 2012

Originally posted by : Saket Sinha
	Yes, definately you can claim interst deduction under sec 24 and pricipal repayment under sec 80C. on such property. In case of urs show ur house as deemed to be let out .

many thanks Saket for your reply,

infact there were two thing which i want to ask,

1. how to show my house is deemed to be let out.

2. my house is under my possession since almost a year . how long IT dept will wait for me to declare it as let out. eg. sya after 2 yrs from my possession, they will start considering my house as a let out and claim a nominal rent amount of 3000 per month, as i have read that nominal rent amount whihc IT dept may consider is 3000 inr per month.

ANUBHAV VISHNOI (-) (150 Points)
Replied 19 November 2012

Hi Kishor,

If you have only one house property in your name then it is up to you how you deal with your house. You can self occupy this house or let out this house. Income tax department will not decide the status of your house own its own. But if someone has two house properties then one has to be deemed to be letout. But you have only one house so you can treat it as per your own choice.

You can claim deductions for both interest and principal amount of loan on your own house.

If you self occupy this then interest upto rs 150000.

If you letout this then there is no limit for interest (interest can be claim for any amount even beyond rs 150000).

I hope this will help you.

1 Like

Kishor (Others) (53 Points)
Replied 20 November 2012

many thanks Anubhav,

got your point very well. but at present i am staying with my parents and claiming HRA exemption right.

so obviously as per IT records i m not staying in my house. so the only option left is let out.

but i haven't got any tenant yet. and so i say that the house is vacant. but should IT dept take my words or i'll have to pass thru any further scrutiny.

Regards,

Kishor.

saurabh goyal (self employed) (103 Points)
Replied 20 November 2012

As you bought a house in other city and staying in other city on rent (in your case on parents house) for job purpose , then you can directly claim HRA benefits , as your concern is that whether you have to show that your owned house is vacant or rented out , it doesn't matter . Only keep in my mind that if you would have rented out that out and whatever rent you would get that will be added in your basic income & you’d have to pay according to your income tax slab.

Secondly you will able to get benefits of 80c only after possession & you can still claim on interest part of your home loan under 24 b (for more details read this section )

Fine Note: You have to ask rent receipts from your parents for be on the safe side if any scrutiny happens

ANUBHAV VISHNOI (-) (150 Points)
Replied 20 November 2012

Kishor,

I am not agree with saurabh for not claiming deduction u/s 80 c, definitely you can claim deduction under this section for principal amount of loan.

Although you are staying in another city on rent but it does not mean that your own house in another city will be deemed to be let out by the income tax department. You have only one house property in your name and that may be kept for your own use as a self occupied, income tax department will not say anything that why didn't you letout your own house if you are living in another city, neither IT department take notional amount of rent for your own house. Yes, if you have two houses only then you have to select one house for self occupied and another house will automatically be deemed to be let out. But you dont have to worry bcoz you have only one house. You may keep this house as a self occupied. You dont need to show rental income for this house. If you find suitable tenant only then show rental income. But I will suggest that you should let out your house bcoz by this you can take deduction for interest amount limitlessly ie for unlimited amount.

And deduction u/s 80 c will definitley be allowed to you.

I hope now everything is clear to you.

saurabh goyal (self employed) (103 Points)
Replied 20 November 2012

@ anubhav

you do not get any income tax benefit on the principal amount for the EMIs that you paid before getting possession of your house (as principal component can be claimed only after you get possession of the house)

ANUBHAV VISHNOI (-) (150 Points)
Replied 21 November 2012

Dear Saurabh,

If he got the posession then what is the problem. He is paying EMI and that consists of interest and principal. And where is written that if a person gets posession then he will not get deduction under section 80c. Pls read section 80c.

thanx

ANUBHAV VISHNOI (-) (150 Points)
Replied 21 November 2012

Dear Saurabh,

thanx

Kishor (Others) (53 Points)
Replied 21 November 2012

Thank you all.

got all of your points. its my first house so its upto me whether to let out or not. if more than one house then only the issue comes for let out or notion rent etc.

once again many thanks to all for this clarification.

Regards,

Kishor.

ANUBHAV VISHNOI (-) (150 Points)
Replied 21 November 2012

Kishor did you see, Mr saurabh has rectified all his pervious mistakes. He was saying that you can't take deduction u/s 80c after posession but now he reversed his answer. Any way it is good for you kishor you will not be confused at all.

Thanx

GiriRaaj (Articleship Traing ) (157 Points)
Replied 30 November 2012

Originally posted by : Kishor
	Hello Friends, my case is : i stay with my parents and so i give rent to my parents as house is owned by them. and i claim HRA exemption for that. second i have bought one house in some other city on housing loan and i want to claim interest & principal deduction agianst it. my question is, this house what status would IT dept considered.....i mean whether it would be considered empty or let out. it let out then i have to show its rent also. please guide me. at present the house is under my posession and is empty. regards, Kishor.