Tax benefits when having more than 1 property

Incase I have 2 properties , can I show ANY one of them to be self-occupied irrespective of the fact where I actually reside/self-occupy.
As I know it is always beneficial to show the property with maximum interest (from Home loan) to be shown as rented to get tax benefits”.

In mycase I have 2 properties : 
1)  S (currently residing and has outstanding loan)
2)  R (currently rented out and has no loan obligations).

Even though I currently stay at S , can I still show it as rented out fo taxation purpose. I have read several online articles which say that this perfectly OK as it is left to the assessee  
to decide which one is shown as rented or self-occupied.

Would like to know the opinion on this.
Asked 1 year ago in Income Tax from Hyderabad, Telangana
Yes you can do the same. This is little bit tricky and need to be careful when any objection comes.

The Tax Department wants you to assume only one of the properties to be self occupied and therefore the Gross Annual Value of such a house will be nil. And Interest on Borrowed Money (for purchase or construction) up to Rs 2,00,000 shall be allowed to be deducted.

The Tax Department does not impose upon you which of the properties should be considered as let out. That choice is completely yours. Also, in case of a let out property, there is no limit on the amount that you can claim towards interest on borrowed money which means there is no cap of Rs 2,00,000. Now here is the opportunity for you to save tax – choose the house you would want to declare as let out where you have higher interest cost and lower Annual Value and this will in turn reduce your overall tax liability. 
Shyam Sunder Modani
CA, Hyderabad
955 Answers
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No you cannot show rented property as self occupied. and you will have to restrict the deduction of interest to ceiling amount applicable to you.
Vijay N. Kale
CA, Hyderabad
248 Answers
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Might be I stand by my opinion.
Vijay N. Kale
CA, Hyderabad
248 Answers
4.9 on 5.0
  Talk to Vijay N. Kale

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