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Deduction u/s 24(b)

03 February 2021

I am a CA Inter Student

I had learn't that the maximum limit of deduction under section 24(b) for Self Occupied House Property (maximum 2) is Rs. 30000. However assessee can claim a deduction of 2,00,000 if three conditions are satisfied:

1. Loan must be for purchase or construction of HP

2. Loan must have been taken before 1.4.1999

3. If loan is for construction then it must have been completed within 5 years from the end of f.y. in which loan was taken.

My doubt is that, this limit for 30000 or 200000 is for 1 HP or for both HP. Suppose I took a loan of Rs. 20000 for repairing one and Rs. 100000 for purchasing another. So how much exemption I will get?

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5 Replies

CA ABHAY GUPTA (Practice) (3230 Points)
Replied 03 February 2021

If there is two houses then you have to select one self occupied and other deemed let out, and yes you can claim deduction of Interest for both the houses.

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Abhay Gupta (27 Points)
Replied 03 February 2021

Sir, in ICAI mat it's written that at max we can have 2 SOPs and after that 3rd will be treated as DLOP ( Budget 2019)

Kapadia Pravin (17259 Points)
Replied 03 February 2021

Yes. That's right. it's 2 SOPs

Abhay Gupta (27 Points)
Replied 03 February 2021

So how to solve the problem?

CA ABHAY GUPTA (Practice) (3230 Points)
Replied 03 February 2021

Now with the amendment, one may not be able to claim the 2nd house as deemed let-out and the overall interest deduction u/s 24 for both the self-occupied houses will be restricted to Rs. 2 lakh resulting in lower losses under the head house property.