I want to confirm my following understanding:
Context:
- Person is a private sector employee, so it means he gets HRA.
- Person falls in 30% tax bracket
- Person takes a home loan of 29 lakh and value of the property is 40 lakh
- Person will not live in that property, he will either rent it or his parents will live
- Person is already utilizing his 80C exemption
- This is means person can only apply for a maximum of 2.5 lakh of exemption
Questions:
- With the above-stated conditions, am I correct that the maximum exemption he can apply for is 2.5L?
- Considering the 30% bracket and availing an additional 2.5L exemption against the home loan, am I correct that the maximum additional saving for him will be 75,000?
- Does it matter whether the person lives in that home or rent it out? Does it impact tax calculation?
- Any other key consideration I am missing related to tax calculations?
If any tax expert could help clarify/confirm my understanding, it will be greatly appreciated.
Warm Regards
CAclubindia
