Computation of income under the head “ Income from house property"

Friends,

Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes has issued Circular No. 17/2014 in which the instructions regarding loss on House Property as been given. While taking into account the loss from House Property, the DDO shall ensure that the employee files the declaration referred to above and encloses therewith  a computation of such loss from house property. Following details shall be obtained and kept by the employer in respect of loss claimed under the head ―Income from house property‖ separately for each house property:

• Gross annual rent/value
• Municipal Taxes paid, if any
• Deduction claimed for interest paid, if any 
• Other deductions claimed
• Address of the property
• Amount of loan, if any; and
• Name and address of the lender (loan provider)

Conditions for Claim of Deduction of Interest on Borrowed Capital for Computation of Income From House Property [Section 24(b)]:

Section 24(b) of the Act allows deduction from income from houses property on interest on borrowed capital as under:-

(i) the deduction is allowed only in case of  house property which is owned and is in the occupation  of the employee   for his  own residence.    However, if  it is  actually not occupied by the employee in view of his place of the employment being at other place, his residence in that other place should not be in a building belonging to him.

(ii)       the quantum of deduction allowed as per table below:

Sl No	Purpose of       borrowing capital	Date of borrowing capital	Maximum Deduction allowable
1	Repair  or  renewal  or  reconstruction  of the house	Any time	Rs. 30,000/-
2	Acquisition or construction of the house	Before 01.04.1999	Rs. 30,000/-
3	Acquisition or construction of the house	On or after 01.04.1999	Rs. 1,50,000/- (upto AY 2014-15)
			Rs. 2,00,000/- (w. e. f. AY 2015-16)

In case of Serial No. 3 above

(a) The acquisition  or construction of the house should be completed within 3 years from the end of the FY in which the capital was borrowed. Hence it is necessary for the DDO to have the completion certificate of the house property against which deduction is claimed either from the builder or through self-declaration from the employee.

(b) Further any prior period interest for the FYs upto the FY in which the property was acquired or constructed (as reduced by any part of interest allowed as deduction under any other section of the Act) shall be deducted in equal installments for the FY in question and subsequent four FYs.

(c) The employee has to furnish before the DDO a certificate from the person to whom any interest is payable on the borrowed capital specifying the amount of interest payable. In case a new loan is taken to repay the earlier loan, then the certificate should also show the details of  Principal and Interest of the loan so repaid.

Interest on Housing Loan - Details of Income Tax Act

Friends,

Interest on borrowed capital is allowable as deduction on accrual basis (even if account books are kept on cash basis) if capital is borrowed for the purpose of purchase, construction, repair, renewal or reconstruction of the house property.

The following aspects concerning claim for deduction of interest are to be kept in view:

The interest is deductible on ‘payable’ basis i.e. on accrual basis. Hence it should be claimed on yearly basis even if no payment has been made during the year.

For claiming interest, it is not necessary that the lender should have a charge on the property for the principal amount or the interest amount. Means mortgage of House is not necessary.

In Shew Kissan Bhatter v. CIT (1973) 89 ITR 61 (SC) the Supreme Court has decided that interest payable for outstanding interest is not deductible.Interest on late deposit (interest on interest )not allowed.

Taxpayer cannot claim deduction for any brokerage or commission paid for arranging loan either as a one time arrangement or on periodical basis till the loan continues. 

In terms of circular No. 28 dated 20th August 1969, if an assessee takes a fresh loan to pay back the earlier loan, the interest on the fresh loan would be deductible. 

Interest on borrowing can be claimed as deduction only by the person who has acquired or constructed the property with borrowed fund. It is not available to the successor to the property (if the successor has not utilized borrowed funds for acquisition, etc). In other words, the relationship of borrower and lender must come into existence before it can be said that any amount or any other money is borrowed for the purpose of construction, acquisition, etc., of house property by one person from another and there must be real transaction of borrowing and lending in order to amount to any borrowing. 

In case of Central Government employees, interest on house building advance taken under the House Building Advance Rules (Ministry of Works and Housing) would be deductible on the basis of accrual of interest which would start running from the date of drawal of advance. The interest that accrues in terms of rule 6 of the House Building Advance Rules is on the balances outstanding on the last day of each month - Circular No. 363, dated June 24, 1983. 

Any interest chargeable under the Act, payable out of India on which tax has not been paid or deducted at source, and in respect of which there is no person in India who may be treated as an agent, is not deductible, by virtue of Section 25, in computing income chargeable under the head “Income from house property”. 

Loan can be taken from any body,unlike section 80C where the specified institutions has been given in section 24(b) no institution has been defined ,means interest payable even to friend /relative etc for House is also deductible under section 24(b)

Chandigarh Housing Board Recruitment 2012

Friends,

Chandigarh Housing Board (CHB) invites applications for the various posts in its department. The interested candidates can apply for these posts on the prescribed performa as given in the advertisement. There is seprate performa for each post. So the candidates should select the perform for which post they are apply for. The description of Posts is as under :-

• Clerk   - 11 Posts in the Pay scale of Rs. 5200-20200 with a Grade Pay of Rs. 1900
• Driver - 01 Post   in the Pay Scale of Rs. 5200-20200 with a Grade Pay of Rs. 2000
• Peon   - 02 Posts in the Pay Scale of Rs. 4900-10680 with a Grade Pay of Rs. 1300

Application Fee : Rs. 150 ( Rs. 75 for SC Category Candidates)

(No Fee will be charged from the Physically Handicapped and Ex-Servicemen candidates)

Last Date : 15th March 2012.

The application on the prescribed format alongwith Bank Draft and all relevant documents complete in all respect should be sent to the follwoing address:

Secretary, Chandigarh Housing Board, 

8- Jan Marg, Sector -9,

Chandigarh.

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