Income from house property- section 24(b)

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.

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?

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.

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.

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

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.

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,

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.