Have one doubt in the housing loan, would appreciate if you can sort it out:
While taking home loan, let's say if in my EMI, the intreset part is 300000/- and I rent out the property. 1. Can I rent it out to my wife or to anyone of my family?
2. Let's say if I rent it out at Rs. 5000/- pm., so annual is 60000/- and after deducting 30% for the repairs and all the actual amount earned will be Rs 42000/-
So my loss of house property becomes Rs. 300000 - Rs. 42000 = Rs. 258000/-
So Can I claim all this as deduction under section 24, since I have let out my property to my wife, thus I am not the self occupant, and hence since there is no limit on section 24, in case of let out property.
Is it right as per the tax laws?
Do you see any problem in this proposed scheme.
Another Doubt different from above lines:
Can I declare a home as self-occupant for a house taken with home loan in a city other then where I work, even though not me but my family is occupying the same.
If yes, then in that case am I also eligible to claim HRA for the city where I am working?
I think a person who has paying EMI for home loan can claim for Principal part of EMI even if the house is not completed in current financial year.
It's a fact as in my organization and my 100 friends using this facility. They are living in rented house and their house will be complete in around June 2007 but they are getting tax benefit of Principal part.
RE:Information printed wrong
by adroit on Jun 23, 2006 01:23 PM
Hi Saurabh!
If the property is not constructed before the end of the financial year deduction under section 80C can not be claimed for repayment of principal in that financial year.
The reason being this deduction under section 80C is available only in respect of "Residential House Property".
The property which is under construction is not a "House Property" under the tax laws.
Thus deduction can not be claimed in respect of house property which is under construction.
Though your payroll has given you a tax benefit, in case your case is selected by tax department for scrutiny (chances of which are very rare) , the deduction, which is wrongly claimed, would be definitely disallowed.
Further, your employer would also be made to pay penalty for allowing incorrect tax deduction.
RE:Information printed wrong
by viswanath on Jun 14, 2006 06:39 PM
Pre EMI can be claimed only after the house is ready for possession at the rate of one/fifth of the the total pre/emi paid.
A good article but don't you think any discussion on Home Loan is quite inconclusive without discussion of Sec 24. This where the maximum benefits acrrue to an individual.
