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Need help for income tax related query

Trina (MBA) (25 Points)

10 September 2014

Hi, I own a second house along with my first house.Both are purchased by taking loan from bank. House 1 is declared in IT as self occupied and therefore I am claiming tax for both principal(80C) and Interest amount. House 2 now needs to be declared as let out property. My questions are: 1) Am I supposed to show nominal rental income on house 2( although in actual it is not rented for entire year). 2) What are the documents need to be furnished to my office to get IT deduction on its loan's interest amount. 3) How shall I do the calculation for the house 2 if it is vacant for entire year. Please help me.

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8 Replies

Roopesh Gangisetty (Article trainee) (176 Points)
Replied 10 September 2014

Dear Trina,

You can explain to your office stating that there is no income from 2nd Property, Such that they will consider your Income from House property(2) as nil.later as a deduction you can deduct actual interest paid for such (2) property. And you can declare such interest paid as House Property Loss.

For Example:

Income generated from your 2nd Property is ZERO

Interest paid by you is 1,50,000 rupees

than you can declare Rs 1,50,000 as loss from House property and you can be deducted to such extent.

Thank you

Roopesh G

8050341139

(Guest)

You are already claiming 80C and interest u/s 24 deduction for the 1st house( self occupied).

Though Income from 2nd house is actually ZERO, the notional rent should be considered. You can take the approximate rent any house would fetch in that area as rent and then deduct the interest.

You have to give the interest certificate from the bank to your employer.

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Joswin Punchakunnel (Chartered Accountant) (314 Points)
Replied 11 September 2014

agree with madhavi padit,

dear roopesh ,in respect of more than one house, only one can be considered as self occupied.

the other one shall be deemed to be let out, even if it is not let out and a notional rent should be filed

1 Like

Trina (MBA) (25 Points)
Replied 11 September 2014

Thank you all.. It was really helpful. one more clarification I would request, is there any way I have to provide any document for the notional rent for the 2nd house, or I can survey the rent in that area and put an approximate figure?

Roopesh Gangisetty (Article trainee) (176 Points)
Replied 11 September 2014

agree with tony and madhavi

Pulkit Gupta (CA in Practice) (172 Points)
Replied 11 September 2014

1. The income from house property is the only head where notional income is chargeable to tax. The taxability may not necessarily be of actual rent or income received but the potential income, which the property is capable of yielding. So you have to pay tax on the rent amount prevailing in your locality. Further you can claim 30% deduction and interest on loan.

2. You can ask the bank for Interest certificate charged during the FY.

3. There is no hard & fast rule, but you can assess the rent chargeable in nearby locality where the 2nd house is situated. You can request somebody who lives in the same locality on rented property for the copy of rent receipt issued during the same FY. The same will be treat as proof.

In case of any doubt you can approach me @ https://taxhow.in/ask-queries/

1 Like