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house property

diksha (student) (75 Points)

25 March 2017

Hey! Can anyone please tell what are the consequences of showing a let out property as self occupied in the income tax return?

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4 Replies

M.ALTHAF HUSSAIN (ARTICLE STUDENT) (24 Points)
Replied 25 March 2017

Hi,

Actually you have to show only one property as self occupied, remaing properties which is not give as let out that properties you should considered as deemed let out properties,

come to your point ,you have many properties either self occupied or let out ,In that properties you should considered only one property as self occupied remaing covered under either let out or deemed let out.

I hope it will be helpful to you.

regards,

M. Althaf

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Digbijoy Ghosh (Lawyer) (132 Points)
Replied 27 March 2017

Hi!! a person is holding a HBL on a property which is self occupied and getting deduction of Interest & Principal Paid, but last year he bought a new flat in Loan too, the new flat is still under construction. In this case how will I claim deduction of 2nd HBL Interest and principal paid because one can only mention Self-occupied in one property in ITR-2 or ITR-4, as per ITR the 2nd property should be let out or deemed let out, So where to apply for the 2nd HBL deduction as the under construction Flat is neither self occupied nor let-out. Please reply with your valuable advice. Thanks & Regards in advance.

M.ALTHAF HUSSAIN (ARTICLE STUDENT) (24 Points)
Replied 27 March 2017

Hi Digbijoy Ghosh

In your case When posession was completed then only you can consider that property in your income tax returns. till posession is not happend that EMI treated as a Pre EMI What ever you paid as a pre EMI that amount you can claim a exemption U/S24B please refer below information for the same.

Pre-construction interest – is allowed when you have taken a loan for purchase or construction of a house property (not allowed in case of loan for repairs or reconstruction). The deduction for this interest is allowed in 5 equal installments starting from the year in which the house is purchased or the construction is completed. For example, if construction of your property completed in FY 2014-15, on 16th June 2014, you can claim 1/5th of interest paid uptil 31st March 2014 when you file your return for FY 2014-15.

Though pre construction interest is allowed to be deducted on the basis of 1/5th each year beginning the year in which the construction is completed – the total amount that can be claimed in a year should not exceed Rs 2,00,000 in case of a self occupied house property.

Conditions for claiming Interest on home loan deduction – You need to meet all the below 3 conditions to claim this deduction

Loan has been take after 1st April 1999 for purchase or construction
The acquisition or construction is completed within 3 years from the end of the financial year in which the loan was taken
There is interest certificate available for the interest payable on the loan

Note that your interest deduction may be limited to Rs 30,000 if any one of these conditions is met –

Loan is borrowed before 1st April 1999 for purchase, construction, repairs or reconstruction of house property\
Loan is borrowed on or after 1st April 1999 for repairs, renovation or reconstruction of house property.