29 January 2014
Dear Experts, I have taken Housing Loan for my Flat of Rs.50Lakh and paying the EMI myself. Due to my personal financial urgency, I have given my flat for a lease of Rs.10Lakh to one of my friend. Please suggest me the income tax benefits on the same. Now my situation as follows.
1. I have Rs.50Lakh housing loan on a flat and I am repaying the EMI to the bankers. I have self occupied that flat for 3 months only. 2. Due to job relocation plan and personal money urgency, now I have given my flat to one of my friend for an interest free lease of Rs.10Lakh for three years. After three years I have to repay him Rs.10Lakh and get back the house occupation. Till that time he has right to use the flat for his own purpose or let out the property as per his interest. If he let outs, he will receive the rent and I didn’t have any share on the rental income. 3. Due to cancellation of relocation plan, I agreed with my friend that I will pay him rent till next three years. Now I am staying in the same flat and paying rent of Rs.15,000/- PM to him. And also I am paying the EMI to the bank for the same flat.
Kindly suggest me how can I get tax benefit on the same.
31 January 2014
Dear Avtar Sir, Thank you so much for your reply. Since I am paying the rent through a cheque to the third party as per the rental agreement, it is my actual expenses only. If I declare the SBI rate of Interest on the lease amount of Rs.10Lakh under the head income from other source (as notional income from house property), can I get the both HRA and EMI Deductions? Please suggest me the way to claim my actual expenses in my tax computation. Thank you, Regards, Mahendra
31 January 2014
You can claim EMI (interest as well as principal) but the amount of rent of Rs.15000 cant be allowed as rent in any circumstances. If such things are allowed to happen then 99% of people staying in their homes will adopt this practice.
31 January 2014
Dear Sir, Thanks for your response. If I let out own property and if stays in rented how, I can claim both HRA Deduction and EMI payment right..? Since already I have lease agreement with third person and due to the unexpected change in my relocation, I have to stay in rented house. So I opted the house for rental purpose instead of going for other one. Please let know the tax applicability if I say in rented house and if I let out my own house in bangalore. Thank you, Regards, Raja Mahendra
31 January 2014
Dear Sir, Thanks for your response. If I let out own property and if stays in rented how, I can claim both HRA Deduction and EMI payment right..? Since already I have lease agreement with third person and due to the unexpected change in my relocation, I have to stay in rented house. So I opted the house for rental purpose instead of going for other one. Please let know the tax applicability if I say in rented house and if I let out my own house in bangalore. Thank you, Regards, Raja Mahendra
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