A has 2 properties financed by taking home loan and both are vacant during the year. Can he treat both of them as on deemed rent or is he compulsorily to choose one as self occupied? Will it make any difference if one property is actually rented and second, being vacant, can he choose it as deemed rent and not as self occupied?
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| Annual letable value or rent received or receivable (higher of the two, if let out for whole of the year, lower of the two if let out for part of the year) |
Say 1,50,000
Since it is vacant --> amt of rent which cannot be reliazed --> 1,50,000
Put interest on borrowed capital -->[ limited to 2,00,000] say 1,20,000
For second house same as above
Int on borrowed capital say 1,00,000 --> 80000 will be granted
So that total Int on both Houses is 2,00,000
Limt of 200000 on interest is applicable for self occupied house. Is it also applicable for deemed to be let out?
Further in case house is deemed let out, annual value will be as per municipal valuation or will equal to reasonable rent expected in that locality for similar house, and not will be NIL. Kindly give your views
1) Limt of 2 lk for Self occupied or vacant
2) For rented properties - no limit
3) The rent you may have got - had you let it out. i.e the market value of rent
4) It cannot be NIl in case of vacant. But in case of self occupied put NIl
5) If annual value is 0 then cannot claim municipa taxes - only interest on borrowed capital.
Rahul Dang & Associates-Chartered Accountants
Pune
CA Inter
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Shaswat initial support private limited
Ahmedabad
CS
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