Interest on housing loan allowed
This query is : Resolved
20 February 2015
How many amount are allow in head interest on borrowed capital (housing) for having two house and taken two separate housing loan amount are 170000/- and 27800/- approx. For FY 2013-14. Both of self occupied house.
20 February 2015
Hi Bikas,
If more than 2 houses are self occupied in that case you have to treat the same as follows :
You own more than one Self Occupied House Property
In case you own more than 1 House Property and both or all are self occupied and not let out – which means either you’ve made one of them your residence and use the other one for some of your own purpose(not business or profession, since that is covered under the head Profits & Gains of Business & Profession). Your family, children stay there or you use the other one as a holiday home. In this case you will be allowed to treat only one of the properties as Self Occupied and all others are considered to be Deemed to be Let Out. Or simply, you income for this house property will be calculated as if it has been let out.
Any one property can be chosen as Self Occupied Property – The Tax Department wants you to assume only one of the properties to be self occupied and therefore the Gross Annual Value of such a house will be nil. And Interest on Borrowed Money (for purchase or construction) up to Rs 2,00,000 or Rs 30,000 (if taken for repairs or reconstruction) shall be allowed to be deducted.
For the remaining properties (one or more) there will be an assumption of being let out – The Tax Department does not impose upon you which of the properties should be considered as let out. That choice is completely yours. Also, in case of a let out property, there is no limit on the amount that you can claim towards interest on borrowed money which means there is no cap of Rs 2,00,000. Now here is the opportunity for you to save tax – choose the house you would want to declare as let out where you have higher interest cost and lower Annual Value and this will in turn reduce your overall tax liability. ( Note that – Loss under the head House Property is allowed to be deducted from other heads of income in the current year and can be carried forward for 8 years and set off against income from house property in those 8 years).
You are not questioned about 2 loans for both these houses – except of course by the banks – they will make sure you have sufficient capacity to pay off the loans. You are not asked by the tax department regarding your choice of deemed to be let out property.
Regards
If more than 2 houses are self occupied in that case you have to treat the same as follows :
You own more than one Self Occupied House Property
In case you own more than 1 House Property and both or all are self occupied and not let out – which means either you’ve made one of them your residence and use the other one for some of your own purpose(not business or profession, since that is covered under the head Profits & Gains of Business & Profession). Your family, children stay there or you use the other one as a holiday home. In this case you will be allowed to treat only one of the properties as Self Occupied and all others are considered to be Deemed to be Let Out. Or simply, you income for this house property will be calculated as if it has been let out.
Any one property can be chosen as Self Occupied Property – The Tax Department wants you to assume only one of the properties to be self occupied and therefore the Gross Annual Value of such a house will be nil. And Interest on Borrowed Money (for purchase or construction) up to Rs 2,00,000 or Rs 30,000 (if taken for repairs or reconstruction) shall be allowed to be deducted.
For the remaining properties (one or more) there will be an assumption of being let out – The Tax Department does not impose upon you which of the properties should be considered as let out. That choice is completely yours. Also, in case of a let out property, there is no limit on the amount that you can claim towards interest on borrowed money which means there is no cap of Rs 2,00,000. Now here is the opportunity for you to save tax – choose the house you would want to declare as let out where you have higher interest cost and lower Annual Value and this will in turn reduce your overall tax liability. ( Note that – Loss under the head House Property is allowed to be deducted from other heads of income in the current year and can be carried forward for 8 years and set off against income from house property in those 8 years).
You are not questioned about 2 loans for both these houses – except of course by the banks – they will make sure you have sufficient capacity to pay off the loans. You are not asked by the tax department regarding your choice of deemed to be let out property.
Regards
20 February 2015
1 house shall be sop and 1 as dlop and for fy 13-14 for sop it shall be allowed upto 1,50,000 only and for dlop there is no restriction as such
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax on capital gains revoked us 54f
- Should I include march foreign salary received in April in my income for FY 2023-24?
- Inventory of finished goods
- Sale of property furniture sale
- Filing of Form 10BB instead of Filing Form 10B
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- Confusion around Form 26QB fields
- Applicability of Ind As to associate of associate
- Refund of AY 22-23
- Disallowance of Section 43B(h) to sez units
- Last year input claim shown in gstr9
- GST Registration Cancellation books of accounts asked by officer
- TDS Deduction Online Learing Platform
- Point (III) 9 of GSTR-9C
- As per our records, find the below outstanding demand(s)* and interest payable u/s 220(2):
- Regarding transaction th. credit card
- HSN Details in IFF/GSTR-1 & in GSTR 9
- MIS MATCH OF INVOICE NUMBER
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
Trending Online Classes
CAclubindia
