Interest exemption for income tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 September 2013 SIR,
PLEASE CLARIFY THE FOLLOWING :

ONE OF OUR STAFF HAS BUILT A HOUSE.

NOW HE HAS TAKEN A HOME LOAN TO CONSTRUCT THE FIRST FLOOR ON THE EXISTING GROUND FLOOR.
THE CAPITAL BORROWED FOR FIRST FLOOR IS RS.3750000-00. THE BANK HAS GIVEN STATEMENT TO CLAIM INTEREST FOR EXEMPTION OF INCOME TAX. INTEREST IS RS.331698.05 AND PRINCIPLE IS RS.183,557.95.

THE GROUND FLOOR IS SELF OCCUPIED AND FIRST FLOOR IS GIVEN FOR REST FOR RS.8000-00 PER MONTH.

SIR PLEASE LET ME KNOW HOW MUCH EXEMPTION HE MAY GET ON BANK INTEREST.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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06 September 2013 You are saying money borrowed for the purpose of construction of first floor, so interest debited by the bank is only for the finance on first floor. So such interest total amount is related to first floor only. So you said first floor is given for rent so entire interest(i.e Rs. 331698.05) on borrowed money shall be claim as deduction under section 24(b).

OM SAI SRI SAI JAI JAI SAI

Querist : Anonymous

Querist : Anonymous (Querist)

06 September 2013 SIR THE BANK HAS GIVE THE PROVISIONAL CERTIFICATE AS LOAN FOR THE PURPOSE : IMPROVEMENT/RENOVATION IN SUCH CASE ALSO WHETHER IS ELIGIBLE FOR THE ABOVE.

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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06 September 2013 Improvement means developing the asset and its capacity. means making new constructions not the repairs. So based on this facts you can consider it.

OM SAI SRI SAI JAI JAI SAI

Querist : Anonymous

Querist : Anonymous (Querist)

06 September 2013 THANK Q SIR

Querist : Anonymous

Querist : Anonymous (Querist)

06 September 2013 SIR, WEATHER INCOME (RENT) ON SUCH PROPERTY IS TO BE DEDUCTED FROM THE INTEREST OR NOT. PLEASE CLARIFY

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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06 September 2013 Yes, The interest shall be deduct from the the rent received.

The computation of income from House property is as follows.

Annual rent - Muncipal taxes(if it is paid by the owner of the propery) = Net Rent - 30% on Net rent value = taxable rent - Interest on borrowed amount u/s 24(b).

OM SAI SRI SAI JAI JAI SAI

Querist : Anonymous

Querist : Anonymous (Querist)

06 September 2013 SIR, SHALL I TAKE IT AS GRANTED.

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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06 September 2013 Sorry i couldn't under your view with the above sentence.

OM SAI SRI SAI JAI JAI SAI