I have a doubt regarding one of the assessee.He has 3 properties,one of which is rented and other two are lying vacant as well as loan is taken on both vacant property.My question is out of vacant property one will be treated as self occupied with highest interest paid and the other will be treated as deemed let out,but there is no rent amount for the deemed let out property.Can i show the rent figure as nil or else what is the solution?
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Sec 24(b) of income tax act 1961
Replies (3)
Only one property can be shows as self occupied, for rest you have to pay rent. In order to calculate the notional income, gross Annual Value of the property needs to be calculated first. The Gross annual value is considered to be the highest between the
1) Rent received or receivable
2) Fair Market value
3) Municipal value
Strategy would be like this. The property on which interest on loan is highest must not be shown as Self occupied. Notional rent may be taken for this property and the enire interest can be claimed ( without limit of 2 lakhs). If there is a loss from this property that can be set off against the property fetching rent. In addition the self occupied property interest upto 2 lakhs can also be claimed.
The thing is if we calculate notional rent as per above formula,say if we take municipal value of rent going on in particular area,then r u sure therewont b any prob.meaning client ko notice toh nahin aayega na??
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