The Assignee qualifies as a resident of India for the tax year 10-11. He has a house property situated outside India and has availed a foreign bank loan on the same. The property was let-out. During the tax year 10-11, the assessee has paid interest on the loan availed outside India from the rental income the property has generated outside India. Can the assessee avail the deduction for the interest payment from his house property income? or Since, no TDS was deducted, he would be denied the benefit of claiming the interest payment deduction, by virtue of Sec 25 of the Income tax Act?
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Interest paid on houseproperty loan availed outside india
Replies (1)
The resident assesses is required to pay tax on his world income.
So the Income generated from the house property outside India would be considered as his income in India, & would be subjected to tax accordingly. However he would be eligible for the taxes & interest paid in the foreign country. The Income earned in the foreign country would be converted in INR as per the rate prevailing during the respective month when the rent was received. Same way taxes & interest on loan wud be converted.
Please note that there is no TDs applicable for the interest on the home loan taken. Hence he would be eligible for the claiming of interest deduction.
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