Wednesday, 5 July 2017

Deduction in Income from House Property


Deductions:


DescriptionNature of Deductions
Municipal TaxesMunicipal taxes including service-taxes levied by any local authority in respect of house property is allowed as deduction, if:
a) Taxes are borne by the owner; and
b) Taxes are actually paid by him during the year
.
Standard Deduction[Section 24(a)]30% of net annual value of the house property is allowed as deduction if property is let-out during the previous year.

Interest on Borrowed Capital *
[Section 24(b)]
a) In respect of let-out property, actual interest incurred on capital borrowed for the purpose of acquisition, construction, repairing, re-construction shall be allowed as deduction
b) In respect of self-occupied residential house property, interest incurred on capital borrowed for the purpose of acquisition or construction of house property shall be allowed as deduction up to Rs. 2 lakhs. The deduction shall be allowed if capital is borrowed on or after 01-04-1999 and acquisition or construction of house property is completed within 5 years.
c) In respect of self-occupied residential house property, interest incurred on capital borrowed for the purpose of reconstruction, repairs or renewals of a house property shall be allowed as deduction up to Rs. 30,000.



Deduction for interest on housing loan [Section 80EE]


Deduction of up to Rs 50,000 shall be allowed to an Individual for interest payable on loan taken for the purpose of acquisition of a house property subject to following conditions:


a) Loan has been sanctioned by Financial institution during the financial year 2016-17;
b) The amount of loan sanctioned does not exceed Rs 35,00,000;
c) The value of residential property does not exceed Rs 50,00,000;
d) The assessee does not own any residential house property on the date of sanction of loan;
e) Where deduction has been allowed under this section, no deduction shall be allowed in respect of such interest under any other provision.

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