Interest on housing loan

Tax queries 375 views 3 replies

Soorya

Senior Manager

25 Points Joined December 2011

Hi All

I have a query on treatment of interest paid on housing loan. The rule states that the entire interest repaid can be deducted as loss if the property for which the loan has been taken is rented out.

In a scenario where the property is not rented out but at the same time not self occupied ( owner is staying in another city other than the city wherein the property is located) how the interest paid would be treated.

Will the limit still remain 2 lakhs or the entire interest can be shown as deduction.

Kindly clarify..

Regards

Soorya

Replies (3)

Tribhuvan Aditya Singh

Student as well as Self-employed

3710 Points Joined September 2007

if the property on which loan is taken is considered let out then whole of intt paid will be allowed as deduction under sec 24b otherwise max upto 200000 in current yr if considered self occupied.

Soorya

Senior Manager

25 Points Joined December 2011

Hi Tribhuvan

The question here was how the interest payment would be treated if the property is not let out and neither self occupied. Property remaining vacant without occupancy.

Regards

Soorya

Tribhuvan Aditya Singh

Student as well as Self-employed

3710 Points Joined September 2007

answer is related to that only... let me help you understand it... if the owner currently resides in rented place, then this property will be treated self occupied if vacant and intt will be allowed subject to max 200000. if it will be let out then whole of intt will be allowed under 24b..... now if the owner currently lives in own house then he has two properties now. in that case he has option to select any one house as self occupied and another will be deemed to be let out. if the house on which loan is taken is treated self occupied then intt allowed upto 200000 max, but if treated deemed let out the whole of intt will be allowed...... any more query then feel free to ask.