pavan (Private) (222 Points)
11 December 2015int on loan house A-160000 B-220000
DATE OF LOAN 1/12/97 1/4/99
DATE OF COMPLETN 31/3/2000 31/3/01
CERTICATE OF INT ATTACHED WITH RETURN OF INCOME NO NO
IN DIS CASE WHETHER WE CAN DEDUCT INT ON LOAN FROM AV????
Ruchi
(CA)
(1410 Points)
Replied 11 December 2015
Yes, why not?? If certificate of interest is not attached still it can be claimed.
Stranger
(.)
(5526 Points)
Replied 11 December 2015
Agreed with Miss Ruchi. Further, for the purpose of “amount of interest”, I would like to mention that w.e.f A.Y. 2015-16, interest on house loan for pre-construction as well as post construction period, which can be claimed u/s-24(b) maximum upto Rs.2 lakhs*** (in case of self-occupied property) & there is no maximum limit for let out property, i.e., whole interest can be claimed u/s-24(b). Besides, the interest can be claimed only from the A.Y. relevant to the P.Y in which the house was completed, in which the pre-construction period interest will be from date of loan taken to 31st March of the P.Y. preceding the P.Y. in which the house was completed or date of repayment of loan, whichever is earlier AND the post construction period interest will be from 1st April to date of repayment of loan or 31st March of the relevant P.Y, whichever is earlier...
NOTE: *** If the capital is borrowed (i) before 1-4-1999 or (ii) on or after 1-4-999 but for repairs, reconstruction or renewals or (iii) acquisition or construction of the property has not been completed within 3 years from the end of the financial year in which the capital was borrowed then the interest to claimed will be limited to Rs.30,000/-.
Hence, as per the provisions of law & facts given in the question, in case of House A, maximum interest can be claimed is Rs.30,000/- (if assumed to be self-occupied) or Rs.1,60,000/- (if assumed to be let out) AND in case of House B maximum interest can be claimed is Rs.2,00,000/- (if assumed to be self-occupied) or Rs.2,20,000/- (if assumed to be let out)...
pavan
(Private)
(222 Points)
Replied 12 December 2015
thank you
if muncipal tax is payable or muncipal tax(disputed) can we deduct m.tax????
if i am not wrong if there are more than 2 sohp then we will consider only one as sohp for which int on loan is high????
harish sama
(Article assistant)
(81 Points)
Replied 12 December 2015
Municipal tax paid in respect of house A and House B can be deducted from the lettable value of the respective house. i.e mtax paid in respect of house a can be deducted from the rental value of house a. However if the house is for self occupied, munucipal taxes paid cannot be claimed as deduction as the net relisable value in case of self occupied properties wil be taken as 0 . SO you can claim deduction if the houses are let out
Stranger
(.)
(5526 Points)
Replied 13 December 2015
@ pk: Dear, municipal taxes are allowed as deduction u/s-23 of the Income Tax Act, 1961 from the Gross Annual Value of the house property concerned, if it has been borne & paid by the owner of house property during the Previous Year, i.e., in case the property if situated in foreign country even the municipal taxes levied by the foreign authority are deductible, provided the conditions specified u/s-23 are satisfied. Hence, in response to your first question, the Answer is NO, we cannot claim deduction on account of disputed or payable municipal taxes from Gross Annual Value.
As per the provisions of the Income Tax Act, 1961, we can treat any one of such self-occupied house properties as "self-occupied" & others should be treated as "deemed to be let-out". And this option can be excercised in such a way that the net income u/h "House Property" of the assessee is reduced to the minimum possible way. Thus, you have to assume all the properties as "deemed to be let out" at first instance & compute the "Income from House Property" for each of the house properties & then the option which gives the minimum income under the head "House Property" may be selected.
Example 1:
House A House B
Net Annual Value 1,00,000 1,50,000
Less: Statutory deduction @ 30% 30,000 45,000
Less: Interest on borrowed capital 50,000 40,000
Income u/h "House Property" 20,000 65,000
Option I (House A as self-occupied & House B as deemed to be let-out)
House A = (30,000)***
House B = 65,000
Income u/h "House Property" = 35,000
***due to non-complying of one or more conditions specified in provisions of IT Act.
Option II (House A as deemed to be let-out & House B as self occupied)
House A = 20,000
House B = (40,000)
Income u/h "House Property" = (20,000)
Here, it will be idle to select Option II
Example 2:
House A House B
Net Annual Value 1,00,000 50,000
Less: Statutory deduction @ 30% 30,000 15,000
Less: Interest on borrowed capital 2,00,000 70,000
Income u/h "House Property" (1,30,000) (35,000)
Option I (House A as self-occupied & House B as deemed to be let-out)
House A = (2,00,000)
House B = (70,000)
Income u/h "House Property" = (2,70,000)
Option II (House A as deemed to be let-out & House B as self occupied)
House A = (1,30,000)
House B = (70,000)
Income u/h "House Property" = (2,00,000)
Here, it will be idle to select Option I
Hence, as far as your second question is concerned, the Answer is partly Yes, as there can be different situations, as can be clearly evident from the above examples.
Hope your doubt is cleared now...
pavan
(Private)
(222 Points)
Replied 13 December 2015
int on loan for sohp how much we have to take before1/4/99 and after 1/4/99
Stranger
(.)
(5526 Points)
Replied 13 December 2015
@ pk: if the loan has been taken before 1-4-1999, then straightaway it will be limited to Rs.30,000/- only & if the loan has been taken on or after 1-4-1999 for construction or acquisition of house property then it will be upto Rs.2,00,000/-...
Besides, I have already mentioned the conditions when the interest is limited to Rs.30,000/- in one of my previous reply..u can go through it dear..
Stranger
(.)
(5526 Points)
Replied 13 December 2015
@ pk: Remember these are the maximum limits & not fixed ones..
pavan
(Private)
(222 Points)
Replied 13 December 2015
ok u mean ex: int on loan for repairs renovation of sohp even after 1/4/99 is max limit is 30000
but for construction it is 2lakh max
Stranger
(.)
(5526 Points)
Replied 13 December 2015
@ pk: Dear, for Rs.2 lakhs maximum limit its for both acquisition or construction of the property, provided the acquisition or construction has been completed within 3 years from the end of the financial year in which the capital was borrowed...
Stranger
(.)
(5526 Points)
Replied 13 December 2015
@ pk: Please go through my previous replies you will understand it very clearly without any confusion...
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