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Which itr to be used

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n k abhiram

CA Final CS Final

263 Points Posted on 27 November 2012

Dear Members Pls solve this query

One of my clients having a salary income and House property income ( Single property -4 floors out which 3 are let out and 1 is self occupied by my client.)

My query is

1. Which ITR form to be filled in ? ITR 1 or ITR 2?

2. What is the % to be taken for claiming the interest and principal on loan barrowed against property from SBI as it is both let out and self occupied.

3. what is the impact on tax - If one of the floor is given to his relative say sister in law either on lease or free of cost but no rentals received?

According to me

- only one building is situtated so ITR 1 is to be used

- No % calculation is required

- No rental income received during the period of lease or given to relative wihtout consideration so no question of tax.

This is my opinion Pls suggest If i am wrong and suggestions are invited urgently

Thanks in advance

Replies (1)

CA. Subhash Dangi

Chartered Accountant

1440 Points Posted on 27 November 2012

1. Which ITR form to be filled in ? = ITR 2 is applicalbe since the building is having 4 floors and income from 3 letout properties.

2. What is the % to be taken for claiming the interest and principal on loan barrowed against property from SBI as it is both let out and self occupied. = Apply the appropriate percentage based on Built up area. If all units are similar in size and cost, then take 3/4 and 1/4 for LOP and SOP respectively

3. what is the impact on tax - If one of the floor is given to his relative say sister in law either on lease or free of cost but no rentals received? = As per IT act, only one house can be used for self residence which is most benificial to assessee. Therefore, any one of the floor is given to his relatives on lease or free of cost, the rent receivalbe for the same should be taken as if it is let out and it is to be treated as deemed let out property.