Pre EMI interest tax relief in my case

Hi,

Your company is absolutely correct. There is a provision which restricts house property loss to be Max. 2 lacs.

Reamaining loss can be carried forward in next year's.

Hi,

In case of a let out or a deemed to be let out property, the entire interest is allowed as deduction under section 24 till Financial Year 2016-17. From Financial Year 2017-18 deduction for interest on let out property is allowed upto Rs 2 Lakhs. So what your company has considered is correct.

The maximum cap is Rs. 2 lakhs now.

Regards,

Nikhil.

Yes the company is correct. The maximum deduction allowable is 200000 aa interest.

Dear Sir,

From F.Y. 2017-18, maximum deduction allowed as interest is restricted to Rs. 2 lacs only.

Thanks

Hi

Your calculation of interest deduction is correct. However, only Rs. 2 lac can be set off in this year and the remaining 84643 shall be carried forward.

if it is self occupied house, Interest cap is Rs 2,00,000/-.There is no any cap for Let out Property.

Further, from financial year 2017-18 the cap of Rs 2,00,000/- is made applicable for set off of loss from house property from other head of income and remaining loss can be carried forward to next 8 years and to be set off in next 8 years.

in your case i could not understand that property is let out or self occupied as you have stated notional rent income of Rs 7000 for annum only.

1. No tax relief as of now. But you can consider such interest as part of cost of acquisition when you'll be selling this property.

2. For your case, interest deduction will be same in both cases. But, considering rental income addition, it will be beneficial not to let out the property.

When did you receive letter of allotment? The period of holding of 2 years shall be counted from date of allotment.

Hi,

1. Yes, you can claim pre emi interest if any given year your interest pay out is less than 2.84 lacs (considering the rent if 10k per month).

2. Considering your situation there won't be much difference.

3. Yes, you can claim the exemption from capital gain if you re-invest in another residential property, since your purchase date will be considered as date of allotment which is in 2014 (pls confirm this)

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

Hi,

1. Unfortunately right now there is no avenue to save taxes. However. In the next 5 years you may be able to take this benefit if your interest burden for the year falls below the threshold.

2. Right now it would be beneficial not to rent the property since the rental income will get added to your income but you will not be able to take the interest deduction benefit.

3. If you sell it within a period of 2 years, it will become taxable. I dont think you should expect any special leniency.????

Regards,

Nikhil.

Dear Sir,

If the location of the HP is in the same city where you are working, keeping it vacant will be of no use and you will loose the HRA exemption benefit.

If it is in different city it is better to let it out, earn some rent, claim benefit of Rs. 2 lcas and carry forward the balance loss in next years and claim the benefit in the subsequent years.

OR

Capitalise the cost of interest and take benefit while computing capital gain.

Date of letter of allotment will determine the nature of STCG or LTCG. Assuming you got letter of allotment in 2014-15, capital gain would be Rs.35 lacs.

Thanks

Period of holding starts from the date of allotment and not date of completion or possession. So your property is already in long term bracket. You can very well sell it and invest in another house property to claim 54 exemption.

Interest cap is for 2 lacs .

Dear Sir,

Is the words "letter of allotment" mentioned on the document given to you by builder in April 2014 or not? If it is written then April 2014 otherwise Feb.2018.

Thanks

It will be Feb 2018 as date of possession is important.

Regards,

Nikhil.