Computation of
Income under the head income or loss from house property
– Income Tax Department instructions on
calculation of annual rental value for the income tax deduction in respect of
interest payable on housing loan and
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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:
a)
Gross annual rent/value
b)
Municipal Taxes paid, if any
c)
Deduction claimed for interest paid, if any
d)
Other deductions claimed
e)
Address of the property
f)
Amount of loan, if any; and
g)
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:-
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.
(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 up to 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.
