Interest on housing loan

This query is : Resolved

CA Rashida (Querist)
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14 January 2014 Hi,

I am doing job in Gurgaon and purchased house in Indore.

In gurgaon staying in a rented accomodation and taking HRA benfit for the same.

Property purchased in Indore was rented out for only 2 months and rest of the year it was vacant.So will the property be considered as self-occupied or let out.

Also please confirm If it is self occupied then can I claim interst only upto Rs.1.5 lakh.

If it is considered as let out so am I supposed to show rental income of only 2 months and then can claim full amount of interest paid i.e, Rs.2 lakh.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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14 January 2014 well it wont be considered as vacant or self occupied.....it is very much a let out property...

the 1.5 lakh limit only applies to self occupied or property no being occupied due to job in other city/town (read section 24(b) with 23(2).

Given that 23(2) doesnt apply to property let out for a part of the year, 24(b) limit wont apply..so you can claim full interest.

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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14 January 2014 Legally, you can show the property as let out and can claim vacancy allowance for the period it could not be let out. In this way you can claim deduction of entire amount of interest paid.
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