I’ve taken house mortgage for 2 properties. One is occupied on my own and the second is given on hire. As I perceive that I can declare curiosity profit of two lakhs on every home individually. Is my understanding appropriate?
Your understanding that one is allowed to say solely two lakh of curiosity throughout the 12 months in respect of self-occupied in addition to let loose is partially incorrect. There are totally different guidelines for deduction in respect of curiosity paid on cash house mortgage for self-occupied properties in addition to that are let loose. An individual is allowed to have most of two home properties as self-occupied. In case one occupies greater than two home properties for self-occupation, he has to decide on any two properties as self-occupied and the remainder of the properties are handled as if they’ve been let loose. In respect of such deemed to have been let loose properties it’s a must to supply notional hire at market charge for taxation. In respect of all of the self-occupied properties handled as such you’re allowed to say deduction of upto Rs. Two lakhs in combination yearly. For let loose property together with the self-occupied one and which is handled as let loose you may declare full curiosity in opposition to your rental earnings.
Nevertheless, there’s a ceiling of two lakh rupees of loss computed beneath the Revenue from home property head for all of the properties taken collectively whether or not self-occupied or let loose which you’ll be able to set off in opposition to your different earnings throughout the identical 12 months. Any loss in extra of two lakh rupees which can’t be set off throughout the present 12 months in opposition to different earnings is allowed to be carried ahead. Such introduced ahead loss could be set off in opposition to taxable earnings beneath the home property head within the subsequent eight years.
Balwant Jain is a tax and funding skilled and could be reached on jainabalwant@ gmail.com and @jainbalwant on Twitter
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