Query related to interest exemption and second house

This query is : Resolved

Faruqui (Querist)
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21 July 2012 Dear Sir,

I have a following query,please help me to sough out:

I purchased a 1BHK flat in Chennai in January 2005 on loan and closed the entire loan in 2009.

Though I had a flat,I took a flat on rent for my family as the flat purchased was very small and only my parents were staying in it.

Since I rented a flat I was claiming HRA benefit since my salary has HRA component.

In the income tax return I have never shown notional rent or rental income till F.Y 2011-12.

In December 2011 I purchased a big 2BHK and now we have shifted to the new house and given the 1BHK flat on rent for 8000/- per month.

My interest outgoing for the new flat on loan is approximately 4 lacs.

My query is:

1.Can I claim 4 lacs full exemption if I show rental income of 1BHK flat

2.Since I have not shown any notional/actual rent for 1BHK in last 3-4 years and now from next financial F.Y 2012-13 if I show rental income along with exemption claim of interest and principal,will income tax department take any objection.

Looking forward for your kind guidance and thanking you in anticipation.

Regards

Dr.A.A.Faruqui

Amol S Joglekar

Amol S Joglekar (Expert)
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21 July 2012 Ans1: NO. Income is to be computed per property per person. ANS 2: NO objection from IT Dept. As one self occupied property income can be claimed as NIL. (Your parents were staying in that) To stretch the imagination to other extreme, Assessing Officer may take a view of not disclosing the notional income and may try to create nuisance u/s 271(1)(c). Do not bother about that as there was NO revenue loss to the exchequor.

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Faruqui

Faruqui (Querist)
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21 July 2012 Thanks a lot sir.
I could not understand your reply to Query 1.i.e computation per property per person.

Regards

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Mohit Naithani

Mohit Naithani (Expert)
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21 July 2012 Computation of Income

Income From House Property 0.00
Max from ER and AR)
Rent

Less Municipal tax 0.00
(if paid by owner)

Deduction u/s 24
30% standard Deduction 0.00

Interest on Borrowed Capital 150000.00

Loss from House Prop. -150000.00

Note: You can claim full amount of interest due in previous year (even if its not paid by you)if your house is let out even for a single day in Previous year.

Amol S Joglekar

Amol S Joglekar (Expert)
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21 July 2012 You had one property at Chennai in 2009. This will be self occupied. Now in the year 2011, you purchased one more flat. The loan of Chennai flat is OVER. New flat is on loan. The interest payable ( and not PAID) on this loan is not deductible from Chennai flat rent income.