A house property is let out for 4 months and self occupied for another 8 months what amt of max deduction for interest on loan he wll get if he is paying interest app. rs.185000.wll the property b deemed to b let out and he wll get deduction of whole amt. or ded wll be calculated proportinately for interest paid?
10 February 2009
I have visited http://www.rediff.com/cms/print.jsp?docpath=//getahead/2007/sep/12tax.htm and noted the following:
(1) If a person occupies a house property for self occupation for part of the year and lets it out for another part of the year, she/he will not be eligible for the benefit of self occupation and the gross annual value will be determined as if the house property is let out.
(2) Interest on housing loan is allowed as a deduction from the net annual value of the house property.
When you are required to treat the property as let out for full year for returning income, you obviously can rightfully claim entire amount of Rs 185000 towards interest as expenditure and need not restrict it to Rs 150000 (applicable for self occupied property) or amount worked out on proportionate basis
Also study the Example (Problem)in Para 40.1.4E1 in 31st edition of Singhania's Ready Reckoner
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