Income from house property- section 24(b)

Tax queries 2483 views 10 replies

PARAG KHANDELWAL

Student CA IPC / IPCC

24 Points Joined October 2012

I want to ask a question related to section 24(b), of income tax. I want to know that;

If i have one self occupied house on which i am paying INTEREST of Rs. 85,000 p.a. and i have another house which is under construction, which will be going to complete in next year upto jan -13, on which also the loan is taken by me, EMi will start in next month. and its interest also comes approx. Rs. 90,000 p.a., so my question is that for the A.Y. 2013-14 how much deduction i can claim under section 24(b), wheather the limit of 1,50,000 is for each huse loan or for all the house. Pls. clarify my query.

Thanks & Regards

Replies (10)

Harish

CA Student

568 Points Joined August 2011

Hi

Let us assume that construction is completed, then you will have 2 self-occupied properties.

In that case, you can declare any one property as Self-Occupied at your own option whereas remaining Self-Occupied properties you will have to show as "Deemed to be Let-Out" Property and do tax computation in the manner of Let-out.

If I am wrong correct me.

Sonia

Auditor

112 Points Joined March 2009

I am not sure with Harish answer. As in that case, you are showing Deemed to be let out, what will be rental income? Also, then there will be no limit on Interest?

Harish

CA Student

568 Points Joined August 2011

While computing Deemed to be let out property, Rental income will not be considered for finding GAV. (GAV = Higher of Municipal value and Fair Rental but however restricted to Standard Rent ). Even there will not be any limit in claiming 24 (b) deduction.

I referred CA Taxation material for the same.

Saket Sinha

Student

129 Points Joined October 2011

In case of self occupied property you can claim interest upto Rs150000 therefore an amount of Rs85000 fully deductible in A.Y 2013-14.

In case of another house which is under construction , the interest relating to period until the completion of the construction is allowed in 5 equal intalments commencing from the year in which construction is completed. therefore an amount of Rs 90000 which is preconstuction period interest shall be allowed as a deduction in in equal instalments.

It is beneficial for you to show rental income and take deduction of interest (without any limit) on your second house.

Lakhan

Student

31 Points Joined July 2010

CAN I CLAIM U\S 24 (b) INTEREST IF I HAVE TAKEN LOAN FROM MY FRIEND AND ALSO CAN CLAIM U/S 80 C

CA CS Roshan Begrajka

Chartered Accountants

267 Points Joined June 2012

No lakhan; u/s 24(b) interesr on home loan taken from bank or financial institution is allowed as deduction. loan taken from friend is not allowed as deduction.

ramcharan

articled assistent

367 Points Joined March 2012

Section 24b does not specify as to from whom we have to take loan for the said purpose so I think we can avail the deduction even if we took loan from your friend,

Akshata

CA Final

324 Points Joined January 2010

Hi Lakhan, We can avail loan interest deduction regardless of the source.

Focus

CA-Final Student

272 Points Joined July 2008

Please clarify if the deuction of Rs 150000 under section 24 b is also available if construction of property is completed after 3 years from date of borrowing loan or is it Rs 30000 in that case.