Hi,
I have two questions on rent paid an rent earned in India for Indian citizen.
Example: 1. Is it possible to claim any tax exemption on rent paid? - For individual not employed by an employer
2. If the above person owns 1 /2 houses and getting rent from those properties, I understand that 30% can be deducted from the rent and rest calculated as income and tax paid for that. If no tax can be calimed on the rent paid, is it possible to claim more deduction on the rental properties? Please let me know. Thanks,
Regards,
Tax question on Rental income and rent paid (India)
-
kodur_Sathya
- Posts: 11
- Joined: Tue Aug 04, 2009 8:40 pm
Tax question on Rental income and rent paid (India)
In general, a person who is not entitled for HRA can claim deduction u/s 80GG.
Section 80GG Provides for the benefit. There are few criteria that are to be satisfied.
1) Rent paid - 10% of total income
2) 24000 p.a
3) 25% of total income.
Total income means Gross total income - Chapter VIA Deductions.
However the person or spouse should not own any house in that location.
If there is house in other location and rental is offered, then this deduction can be claimed.
In computing the income from house property
Following are eligible deductions
1) Municipal taxes
2) 30% repairs on Rental income - municipal taxes
3) Interest on borrowed capital.
In case of interst on borrowed capital, any amount of interest if its a lets out property. So any amount can be deducted. The limit of Rs.150000 is applicable only for the self occupied house.
It is more important to note that
Interest means , interest paid and accured (due)
Interest also means interest paid even on jewel loans, borrowings other than the typical home loans. Most of the people believe that interest can be considered only when it is from Housing finance company. Income tax dont provide any restriction on the source. But the restriction is on end use. If you borrow personal loan and spend for house and if one would be able to relate the borrowing to housing, he is still entitled for this deduction. :)
regards
sathya
Section 80GG Provides for the benefit. There are few criteria that are to be satisfied.
1) Rent paid - 10% of total income
2) 24000 p.a
3) 25% of total income.
Total income means Gross total income - Chapter VIA Deductions.
However the person or spouse should not own any house in that location.
If there is house in other location and rental is offered, then this deduction can be claimed.
In computing the income from house property
Following are eligible deductions
1) Municipal taxes
2) 30% repairs on Rental income - municipal taxes
3) Interest on borrowed capital.
In case of interst on borrowed capital, any amount of interest if its a lets out property. So any amount can be deducted. The limit of Rs.150000 is applicable only for the self occupied house.
It is more important to note that
Interest means , interest paid and accured (due)
Interest also means interest paid even on jewel loans, borrowings other than the typical home loans. Most of the people believe that interest can be considered only when it is from Housing finance company. Income tax dont provide any restriction on the source. But the restriction is on end use. If you borrow personal loan and spend for house and if one would be able to relate the borrowing to housing, he is still entitled for this deduction. :)
regards
sathya