22 December 2008
I have one property at my native place where my parents are staying on which I had taken a loan in 2001 and I am paying yearly interest of Rs.80,000/- (approx.). Now I am working in Pune and also I have purchaed property in Pune by taking a loan against which I am paying interest of Rs.1,40,000/- (approx.)
Since both are separate property, Am I eligible for total deductions of Rs.2,20,000/-? or maximum up to Rs.1,50,000/- only.
22 December 2008
1) Under the provisions of Section 23 of IT Act, 1961, an assessee cannot take the benefit of self occupied for more than one house. 2) In this case, you can declare house situate at Pune as self-occupied and claim deduction of Rs. 1,40,000 as interest on borrowed capital and the house at your native place should be shown as deemed to be let out and claim the interest of Rs. 80,000/- as deduction.
22 December 2008
To put Mr Srinivasan's reply in a different way--
For house at Pune, show it as self occupied property. Since annual rental value is nil, you can show claim total interest of Rs 140000 as loss from house property.
For house at native place, show it as let-out. Simply, rental amount adopted by panchayat or municipality for property tax assessment may be shown rent received. From this, you can deduct Rs 80000. Resulting minus figure will be loss from house property
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