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Interest on housing loan

chirag shetty (Article assistant) (56 Points)

05 March 2020

whether we can show new asset purchased which was claimed deduction under section 54F as deemed to be letout and also can we take interest on housing loan deduction on the same....

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7 Replies

Kaushal Thakkar (5 Points)
Replied 05 March 2020

homeowners can claim a deduction of up to Rs.2 lakh on their home loan interest, if the owner or his family reside in the house property. The same treatment applies when the house is vacant

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Kapadia Pravin (17264 Points)
Replied 05 March 2020

The house property owner will get interest on house loan ( loan taken in his name only) deduction upto 2 lakhs on such Self occupied house property.

You referred to 54F deduction ....
But it has no connection to your interest Deduction query.

CA Abhishek Pal (CA Practice) (60 Points)
Replied 05 March 2020

Hello,

As per section 54F (1) proviso (b), If the income from such residential house is taxable under house property then you can't claim exemption under section 54F.

Based on the same, since you are letting out the property you may not claim 54F exemption.

However, there is no condition for claiming interest on housing loan. Since you have rented out the property so you can claim the entire interest under house property. Limit of ₹2lakh is not applicable on rented property. Limit of 2 lakh applicable if you resides on this house.

chirag shetty (Article assistant) (56 Points)
Replied 05 March 2020

Under section 54f section the asset purchased is herein referred as new asset the wordings say so... it does not refer to new asset.. it refers to other asset

CA Abhishek Pal (CA Practice) (60 Points)
Replied 06 March 2020

You can claim exemption on purchase of residential house property only, whether new or old.

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chirag shetty (Article assistant) (56 Points)
Replied 06 March 2020

That means I can claim exemption under section 54f as well as deduction of interest paid right...

CA Abhishek Pal (CA Practice) (60 Points)
Replied 06 March 2020

No, Chirag...please stay with my first reply only, where i mentioned that you can't claim 54F exemption since you have letting out the residential property. You should not show this newly purchase property as letting out under house property.

Pls ignore my second reply, in this reply i was trying to clarify main provision of section, but it's not related to your question.