20 February 2017
hi.
an employee got the possession in fy 16-17.
he stays in the same city on rentals.
total int paid from fy 11-12 till Mar 16 = 14.28 lacs.
current year int 3.81 lacs.
wish to confirm the following :
1. he has only one owned property still can he consider this as let out?
2. as possession was not received he stayed on rented house... so hra benefit available ?
21 February 2017
thanks a lot.
1st point is clear that even though there is one owned property..... an assessee has the option to treat that as self occupied or let out.
however with regards to the second point..... in the same case.... where an assessee is showing the only owned property as let out property and not self occupied property... will he get hra benefit..... here both are in the same city
22 February 2017
hi.... in combination to the above query.... wish to confirm that the stamp duty paid while registration of the said property, which is let out in the current financial year......... will be eligible for deduction from rent income.
kindly reply
01 August 2024
Let's address each of your queries one by one:
### 1. Treatment of Owned Property as Let-Out Property
**Query:** Can an employee, who owns only one property, consider it as let-out for tax purposes if he was living in a rented house due to not having possession of the property?
**Answer:** Yes, an individual can choose to treat their property as either self-occupied or let-out. The choice depends on the actual use of the property. If the property was not in possession and was not used for self-occupation during the financial year, the owner can choose to treat it as let-out property for tax purposes. The decision should be consistent with the actual use and purpose of the property.
### 2. HRA Benefit When Property is Let-Out
**Query:** If the only owned property is shown as let-out and the person is staying in a rented house in the same city, can they claim HRA benefits?
**Answer:** Yes, if the owned property is treated as let-out, the individual can claim HRA benefits for renting another property. HRA can be claimed even if the rented property is in the same city as the owned property, provided the following conditions are met: - The property owned is genuinely treated as let-out and not used for self-occupation. - The rent is paid for the property where the individual resides, and proper rent receipts are maintained.
### 3. Stamp Duty Deduction
**Query:** Can the stamp duty paid while registering the property be deducted from the rental income of the property?
**Answer:** No, stamp duty paid during the registration of the property is not deductible from the rental income. The stamp duty paid is considered a capital expenditure and is added to the cost of acquisition of the property. It cannot be claimed as a deduction against rental income.
**Summary:** 1. You can treat the property as let-out if it was not in possession during the financial year. 2. HRA benefits can be claimed if you are renting a property and the owned property is considered let-out. 3. Stamp duty paid is not deductible from rental income but is added to the cost of acquisition of the property.
For further clarification, always consult a tax advisor to ensure compliance with the latest tax laws and regulations.
CAclubindia
