Tax with home loan and house rent allowance
sembaianathan.k
(Querist) 17 January 2014
This query is : Resolved
Dear sir/Madam,
A central govt employee applied and received home loan from June13 and started repayment the same month. But occupied the house only after construction over ie december13.
While calculating for tax, given interestand principle repayment certificate from june13and house rent certificate from march13 to november 13. office people says rental exemption will be applicable only for march to june13.But i have paid rent and bank loan repayment also during the same period. Is there any rule regarding this ? Kindly guide me. Thanks in advance.
ajay sethi
(Expert) 18 January 2014
consult your CA or raise qery in CA club india .com
Ms.Nirmala P.Rao
(Expert) 18 January 2014
Dear Client,
You can claim deduction on account of your interest payment on home loan but, not the principal loan amount as per Tax Law.Similarly subject to permissible limits as per IT Law you can claim deduction on your HRA. Excess of HRA paid by the company/your employers is a perk and is subject to tax. If you wish to thank me for this reply please click the thank you button on my profile.
Ms.Nirmala P.Rao
(Expert) 18 January 2014
Dear Client,
You can claim deduction on account of your interest payment on home loan but, not the principal loan amount as per Tax Law.Similarly subject to permissible limits as per IT Law you can claim deduction on your HRA. Excess of HRA paid by the company/your employers is a perk and is subject to tax. If you wish to thank me for this reply please click the thank you button on my profile.
Rajendra K Goyal
(Expert) 18 January 2014
Can claim deduction of House Rent for the period for which you have not occupied your own House provided you have actually paid the rent and subject to IT Provisions. Deduction in interest would not be available for that period also. Payment of principal is included in total deduction of Rs. on lac U/s 80(C).
Go through the circular of Income Tax department CIRCULAR NO : 08 /2013
F.No. 275/192/2013-IT(B) Government of India dated the 10th October, 2013
alternately you can post your problem to CA Club India.
R.V.RAO
(Expert) 23 January 2014
as per your query ,your house is ready for occupation on Dec 13.
so your EMI to bank should start from that date.before that date what you pay is pre construction period interest(PRE EMI INTEREST) which you can clainM income tax deduction for 5 years @20%P.A from date of completion/possession.
what does your bank cert. say.pl. come out clearly.
EMI has 2 components. interest deductible U/S 24 under the head "income from house property".Any negative amount Under INCOME FROM HOUSE PROPERTY IS DEDUCTIBLE FROM YOUR TAXABLE SALARY INCOME AND YOU GET TAX REFUND ON FILING IT RETURN.
WHAT YOUR OFFICE PEOPLE ARE MISTAKEN IS YOU OCCUPIED YOUR HOUSE FROM JUNE13. SHOW THEM YOUR BUILDER'S OCCUPATION CERT. SHOWING DEC 13 AS DATE OF OCCUPATION.THEN OFFICE PEOPLE'S MISUNDERSTANDING WILL BE REMOVED.
AS FAR AS BANK CERT. IS CONCERNED ,YOUR BANKER IF AWARE OF YOUR DATE OF POSSESSION/OCCUPATION AS DEC '13,WILL PUT PAYMENTS MADE BY YOU TILL DEC '13 AS PRE EMI INTEREST AND BAL. IF ANY AS PRINCIPAL REPAID AND HOME LOAN INT.FROM THE PERIOD DEC'13 TO NEXT MARCH YEAR END. PL. COME OUT WITH FURTHER QUERIES IF ANY. MEET YOUR TAX ADVISOR./C.A TO HELP RESOLVE FILE YOUR TAX RETURNS AND CLAIM IT REFUND IN CASE YOUR OFFICE DEDUCTS TAX AS PER THEIR ASSUMPTIONS. BUT THEIR FORM 16 IS NEEDED FOR YOUR TAX FILING AND CLAIM REFUND. GOOD LUCK.
