Section 24(b) tax planning

Tax queries 757 views 2 replies

Sonia

Auditor

112 Points Joined March 2009

My client has recently purchased a house, no plans to shift or rent it out for some time.

Will he be allowed Rs. 1.5 lacs deduction on Interest on borrowed capital. (since it will not be treated as self-occupied).

He is currently staying with his parents (that house is in name of his father) and new house is only house in his name.

Also, He is currently showing that he is paying rent to his father to claim HRA Exemption. So if he shows that the new house is self-occupied and he claims Rs. 1.5 lacs deduction, then he will not be allowed HRA Exemptions).

How can i suggest him to save tax liability??

Replies (2)

Parihar Gopal

Corporate Taxation

392 Points Joined November 2009

House loan Interest claim.

while calculating income from house property first annual value of house is to be determined.

House is let out (value will be according to Rent received)
House is self occupied by the owner for own residence. (annual value will be nil)
house cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him(annual value will be nil)