Section 23
(2), (3) and (4) of Income Tax Act, 1961 are applicable to arrive at the incomefrom self occupied property.
As per the
provisions of above referred sections, the annual value of the house or a part
of the house which is occupied by the owner for his residence, or cannot be
occupied by the owner on account of his employment, business for profession
carried out at other place and has to reside at such place in a building not
belonging to him, will be treated as NIL.
However
this is not available in the case of house or part of the house, which is let
tout during entire or any part of the year, or the owner derives any benefit
from such house or a part of the house.
Category of property Position
One house self occupied through- out the year Annual value is NIL
Part of the house occupied by the owner and remaining
part let out for the entire year Annual
value of the part of the house self occupied is NIL
Income from the let out part will be as applicable to
the let out properties.
House or part of the house self occupied for a portion
of the year, and let out for the remaining part of the year.
Annual value of self occupied portion cannot be treated
as NIL.
In case,
where the tax payer has more than one self occupied houses, tax payer has one
option to choose any one of such self occupied house to claim the benefits of
self occupation, and treat its annual value as NIL. The remaining houses will
be treated as let out properties.
Interest
accrued on borrowed capital to construct the house for self-occupation in
respect of loans eligible for deduction taken after 1.4.1999 increased to
Rs.1.50 lakhs per year.
The
ceiling limit on interest on loans eligible for deductions, taken for any other
specified purpose other than acquiring house prior to 1.4.1999 or after
1.4.1999 is limited to Rs.30,000/- however, over all limit is Rs.1,50,000/-.
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