Rent claims on jointly inherited property/second property

Tax queries 363 views 3 replies

Sunetra Sen

Manager

34 Points Joined July 2013

I currently stay in a house which belongs to my grandfather (along with his two brothers). No mutation/sale/partition of the property has been done yet as there are many heirs and settlement will take a lot of time. However, currently I and my mother are the only people staying here. Can I claim rental deduction for this property by showing that I pay rent to my mother on a monthly basis? Is that allowed?
I now plan to purchase another property in the same city as the house as referred to in point #1 above. I also work in the same city where these two properties are located. I plan to go in for a home loan for purchase of the second property but will continue to live in the first property with my mother. Can I claim tax deduction on the home loan on this second property? If yes, what is the limit and are there any other conditions attached. Please note that I do not want to rent this second property out unless mandated by tax regulations.

Replies (3)

W.r.t. 2nd house deduction u/s 80 c can be claimed on repayment of principle amt of housing loan. W.r.t. Int part of housing loan deduction can be claimed on income from house property. If you don't Want to rent out the property then still you can claim deduction and show loss under house property subject to limit of 2 lacs.

URVISH SURATWALA

PROPERIETOR

23 Points Joined May 2013

I have shop in my indivudual books of accounts and the said shop generating rent income, i wood like to transfer the said income from Individual accounts income to my HUF of account income. Pls let me know the procedure.

Member

Management

325 Points Joined February 2010

Regarding your first query, the answer is no. Since it doesn't belong to your mother, how are you going to justify your claim of paying rent to her? She is just another co-owner. For your second query, you can claim deduction under Section 80C for the principal portion of your loan and under Section 24 for the interest portion. If your second property is let out, then there is NO cap on the interest that can be claimed, else it is restricted.