I have Bought a New House and Shifted to the new House from July. The Old House is still Vacant. I plan to rent it out. For the current year, I want to show the New House as Deemed to let out and the Old House as self Occupied.
In that case can I claim Interest of 300000 Lacs as deduction on New House apart from Deemed Rent as Income
Can I also claim 90000 separately as loss from HP on the Self Occupied House.?
Please comment
Yes the above tax planning can be done. Income from the new house will be taxed in your hands as deemed to be let out and whole interest will be allowed as deduction. You can claim interest on your old house of Rs. 90,000/- (max Rs. 150,000/-) if it is for purchase or construction of the house otherwise deduction will be upto Rs. 30,000/-.
| Originally posted by :Harry | ||
| " | I have Bought a New House and Shifted to the new House from July. The Old House is still Vacant. I plan to rent it out. For the current year, I want to show the New House as Deemed to let out and the Old House as self Occupied. In that case can I claim Interest of 300000 Lacs as deduction on New House apart from Deemed Rent as Income Can I also claim 90000 separately as loss from HP on the Self Occupied House.? Please comment |
" |
If u let out the old house even for a day, it is treated as a let out property.
so there is no interest cap on the old house.
New house - it is self occuppied. The Rs.150,000/- current year interest cap applies to it.
your maximum loss on new house can be Rs.150,000/- and old house there is no limit for the loss
| Originally posted by :Harry | ||
| " | I want to show the New House as Deemed to let out and the Old House as self Occupied. |
" |
To show old house as self occupied donot let it out. a SO house let out even for a single day is as good as let out for the entire year.
As a tax planning it is better to let out the new house so that it becomes a let out house and hence entire 300000 deduciton u/s 24(b) can be claimed.
The choice of which house to show as self occupied and which one as deemed let out is available only provided both the houses are self occupied. If you let out any one of them, the one let out will cumpolsorily be let out and the other will remain self occupied.
CAclubindia
