SELF OCCUPIED PROPERTY

New Direct Tax Code 3568 views 4 replies

RAMAKRISHNAN MB

SR MANAGER

56 Points Joined February 2011

Dear Friends

The New Direct Taxes Code is not explicity about Self Occupied Property

Under New Direct Taxes Code, House property is taxable on "Gross Rent" = Rent received or Receivable for the year. As implied from the definition Self Occupied Property is not taxable. This can be extended to any number of Self Occupied property?

and Further what is taxable is "Rent from house property which is "let out" - Can it be implied that HP which are not let out will not be covered under this head consequently the current eligible deduction "Interest" will not qualify for deduction??

Replies (4)

CA SANDESH MAHIPAL

Practicing in GST and MSME

1985 Points Joined September 2010

FOR A.Y. 2010-11

ONLY ONE HP WHICH IS SELF OCCUPIED IS EXEMPT FROM TAX.

IF ASSESSEE IS HAVING MORE THAN ONE HP USING SELF OCCUPIED, THAN OTHER THAN ONE WILL BE TAXABLE.

rohith kanna

icwa

22 Points Joined September 2011

how to calculate prior period interest. pl explain.

Phalgun

Audit Manager

327 Points Joined July 2009

The term Prior period refers to the year beginning from the date of loan & ending on date of repayment of loan or immediate 31st of march of the year in which property was constructed / purchased wichever is earlier. It is alowed in five equal installments.

Eg: Mr.A borrowed loan of Rs.1000000 @ 10 % interest on 01.08.2008 for constructing a property in Noida. The construction was completed on 21.09.2011. Calculate prior period interest.

Solution : Date of borrowal : 01.08.2008

Loan : 1000000

Interest on loan : 10%

Prior period : Date of borrowal - Date of repayment/31st of march (in the year when property was constructed or purchased)

01.08.2008 - 31.03.2011 - 2.8 months

Interest on loan = 1000000*10/100*2.8/5

rohith kanna

icwa

22 Points Joined September 2011

Titin commenced construction of a residential houseintended exclusively for his residence,on 1.11.2008 .He raised a loan of 500000 at 16 per cent interest for the purpose of construction on 1.11.2008.Finding that there was an over-run in the cost of construction he raised a further loan of 800000 at the same rate of interest on 1.10.2009.what is the interest allowable unter section 24, assuming that the construction was compeleted by 31 st march of the relevant previous year.