For a let out property can principal repaid claimed u/s 80c

Tax queries 4600 views 3 replies

Raman

Salaried

78 Points Joined December 2007

Can owner take deduction u/s 80C regarding principal repaid towards housing loan, for a let out property/???

Pls take below example and clarify income and deductions allowed in both the cases below.

Case 1: If owner is salaried employee anual income 8,00,000, rental income 15k pm and investment u/s 80c is 50,000. Interest paid during the year 3,00,00 and principal repaid during the year 50k. Can owner say that loss on house property = 1,80,000-3,00,000 = -1,20,000 and for 50K repaid can he include that with his other investments and claim deduction u/s 80c for 1,00,000.

Case 2: If owner is salaried employee anual income 8,00,000, rental income 15k pm for property 1 and 2nd property self occupied. Investment u/s 80c is 50,000. For eash of property interest paid during the year 3,00,00 and principal repaid during the year 50k. For property 1, can owner say that loss on house property = 1,80,000-3,00,000 = -1,20,000 and for 50K repaid can he include that with his other investments and claim deduction u/s 80c for 1,00,000.

For property 2, interest allowed is 1,50,000 only

Pls clarify.

Replies (3)

Giridhar S Karandikar

Team Lead

7558 Points Joined November 2011

Case1: apart from interest paid, you can also claim deduction on account of municipal taxes from your rental income & again on the net amount you can claim 30% standard deduction. So your loss will be more. You can set-off this loss against your salary income avail the deductions u/s 80C & pay tax on the balance of your income.

Case2: Same procedure to be followed as explained in Case1 above.

CA LALIT WADHWA

FRESHER

105 Points Joined December 2011

u cn claim deduction u/s 80c for repayment of housing loan..

whether it is residential one or let out 4 rent...does't matter

SWAPNA SRINIVASULU

ARTICLED CLERK

32 Points Joined November 2010

Hello Mr Raman, With regard to your query, In case I Against your Rental Income of Rs.180000 , you can claim water tax and property taxes paid for the property and then you can make standard deduction of 30% on balance and you can claim the entire interest against the balance and if there s loss , u can set off against your salary income . U can also claim the amount of principal paid as a deduction u/s 80 C . please ensure that loan has been borrowed from the financial institution. If borrowed from any person other than financial institution, only interest will be allowed as a deduction against house property income and principal paid will not be allowed as a deduction ; similarly in the case II also , as u rightly said in case of self occupied prop, int allowable will be 1.5 lacs