I’ve 3 home properties. How to calculate tax on earnings from them
Question: I’ve 3 home properties. One home is self-occupied; 2nd one was let loose @ 24000 per 30 days for 4 months. The third one is occupied by my dad and mom. I’ve taken a housing mortgage for the third home and am paying EMI. Interest on dwelling mortgage is Rs. 2,40,000 each year (approx.) How do I compute my earnings from home property? Can I declare dwelling mortgage curiosity of 1 home towards one other home’s Income?
Answer: As per the earnings tax legal guidelines an individual can have most of two self-owned homes as self-occupied. In case the tax payer has greater than two self-owned homes as self-occupied, he has to pick out any two of the home as self-occupied and deal with the opposite home/s as deemed to have been let loose. Any home occupied by family on which no hire is obtained might be handled as self-occupied so you’ll be able to declare the primary and third home as self-occupied.
For a home property which is let loose both through the 12 months and even prior to now, you get emptiness allowance for the interval for which the property couldn’t be let loose. So in respect of the second home it’s worthwhile to provide the hire for 4 months just for which it was really let loose.
In respect of all of the properties handled as self-occupied, you might be allowed to assert curiosity for cash borrowed for such home solely upto Rs. 2 lakhs in a 12 months. So you’ll be able to declare curiosity solely upto Rs. 2 lakhs on dwelling mortgage for the third home and the surplus of Rs. 40,000/- must be ignored. Had the third home been let loose, you’ll have been in a position to declare full curiosity towards the rental earnings of this home. In case the loss beneath the home property head for all of the properties taken collectively exceeds two lakhs rupees in a 12 months, you might be allowed to set off solely two lakhs of loss towards different earnings through the 12 months and the loss not so set off is allowed to be carried ahead for eight years for being set off towards home property earnings.
Strictly talking you can not declare curiosity paid in respect of 1 home towards rental earnings of different home however you’ll be able to set off earnings of 1 home property towards lack of one other property.
Balwant Jain is a tax and funding knowledgeable and might be reached on jainbalwant@gmail.com
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