How to Compute Your House Property Income and Claim Deduction u/s. 24(b) ?

Income From House Property

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:

1. Gross annual rent/value
2. Municipal Taxes paid, if any
3. Deduction claimed for interest paid, if any
4. Other deductions claimed
5. Address of the property

The DDO shall also ensure furnishing of the evidence or particulars in Form No. 12BB in respect of deduction of interest as specified in Rule 26C read with section 192 (2D).

How to Claim 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.
• the quantum of deduction allowed as per table below:

In case of Serial No. 3 above

1. The acquisition or construction of the house should be completed within3 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.
2. 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.
3. 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.

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Tax Calculation for Salaried Employee on Income From House Property Head For Asstt. Year 2015-16.

Just, before a few days CBDT has issued a circular for Computation of Income and Income Tax Deductions from Salaries during the Fin. Year 2014-15 u/s. 192 of the Income Tax Act, 1961.  As per this circular Tax Calculation for Salaried Taxpayee on Income under the head of "House Property" clarify as under :

It is reiterated that the DDO can take into account any loss only under the head ―Income from house property. Loss under any other head cannot be considered by the DDO for calculating the amount of tax to be deducted.

Computation of income under the head “ Income from house property :
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:-

1. 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.
2. the quantum of deduction allowed as per table below:

In case of Serial No. 3 above

• The acquisition or construction of the house should be completed within3 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.
• 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.
• 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.

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Request to TDS Deductors to follow up for Filing of Form No. 24G For Asstt. Year 2015-16 - CPC (TDS)

This is to inform you that your office (Accounts Office Identification Number (AIN)) have filed Form 24G for all 12 months in Financial Year 2013-14, however, you have not filed Form no. 24G for any of the months during Financial Year 2014-15.

• Please note that In case of delay in filing of Form No. 24G by the AINs:

• There would be delay in generation of Book Identification Number (BIN) and subsequent intimation of the same by the PAOs to the concerned DDOs.

• This contributes towards delay in filing of quarterly TDS/ TCS statements resulting into levy of late filing fee u/s 234E of the I.T. Act (a sum of Two Hundred Rupees for every day during which the failure continues) on the deductors.

• Late filing of TDS statements also results into the TDS Credit not being available to the deductees (employees / vendors) for claiming the amount of tax already deducted from the payments made to them besides generating correct TDS Certificates for them.

• In view of the above, you are advised to file Form No. 24G well within the due date so that the DDOs are able to file there quarterly TDS / TCS Statements within the due time and avoid levy of fee u/s 234E of the Income Tax Act.

In case you have not filed due to one of the following probable reasons, please inform accordingly to this office with due support of documents:

a) the filing has been centralized and the filing is being done under any other AIN - Please surrender the AIN already allotted to you under intimation to this office

b) new AIN has been procured for filing Form No. 24G and old AIN no. is discarded - Please surrender the AIN already allotted to you under intimation to this office

c) not filed due to some internal problems of organization - Please take necessary steps to file 24G on priority basis under intimation to this office

d) any other problem - Please take necessary steps to file 24G on priority basis under intimation to this office

CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM

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Deduction of Interest on House Loan u/s. 24(b) for Asstt. Year 2014-15.

With reference to circular issued by Income Tax Department No. 8/2013 dated 08.10.2013, deduction of House Loan Interest claiming condition u/s. 24(b) are as follows:


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

1. 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.
   
   
2. 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/-

In case of Serial No. 3 above

1. The acquisition or constructing of the house should be completed within3 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.
2. Further any prior period interest for the FYs upto the FY in which the property was acquired and constructed shall be deducted in equal installments for the FY in question and subsequent four FYs.
3. 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.

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Conditions for Claim of Deduction of Interest on Housing Loan under section 24(b) for Asstt. Year 2014-15

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

1. 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.
   
   
2. 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/-

In case of Serial No. 3 above

1. The acquisition or constructing of the house should be completed within3 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.
2. Further any prior period interest for the FYs upto the FY in which the property was acquired and constructed shall be deducted in equal installments for the FY in question and subsequent four FYs.
3. 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.

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Condition to Claim Deduction of House Loan Interest u/s. 24(b) for Asstt. Year 2014-15

There are two main benefits which are available under Income Tax Act, 1961 in relation to Purchase or Construction of House Property which are described as under:

1. Deduction of Interest on Capital borrowed for purchase or construction of House Property under Section 24 (b) of the Income Tax Act, 1961. (Interest paid by house owner on housing loan)
2. Principle amount paid towards Housing loan for  purchase or construction of House Property under Section 80 C of the Income Tax Act, 1961.
3. The amount stamp duty/ Registration charges paid while acquiring property will be allowed deduction U/s 80C.

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

1. 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.
2. 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/-

In case of Serial No. 3 above

• The acquisition or constructing of the house should be completed within 3 years from the end of the Fin. Year 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.
• Further any prior period interest for the Fin. Years upto the Fin. Year in which the property was acquired and constructed shall be deducted in equal installments for the FY in question and subsequent four Fin. Years. 
• 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 Paid towards housing loan:
     The house property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount payable towards interest on borrowed capital is allowed as deduction under u/s 24(b) of Income tax act.

1. We have to note here Interest payable on barrowed capital is allowed (Interest paid is irreverent here).
2. In case of under construction property, Interest will aggregated from the date of borrowing till the end of the previous year prior to the previous year in which the house is completed and allowed in five successive financial years starting from the year in which the acquisition or construction was completed.
3. In case Assesses is owner of more than one residential property, he may exercise an option to treat any one of the houses to be self occupied and the other houses will be deemed to be let out and annual value of such house will be determined as per Section 23(1)(a) of the Income Tax Act, 1961.

Principle Amount paid towards Housing Loan:
     Any payment made for purchase or construction of a residential house property which is chargeable to tax under the head “Income from House Property” towards any installment or part payment due to any Bank, Financial Institution, Company or Co-Operative Society towards the cost of the house property allotted to him is allowed as deduction U/s 80 C of the Income Tax Act, 1961 to the extent of Rs. 1,00,000 along with other Specified Investments mentioned under Section 80 C of the Income Tax Act, 1961.

Stamp Duty and Registration Charges for a home:
     The amount you pay as stamp duty or registration fee  when you buy a house  can be claimed as deduction under section 80C in the year of purchase of the house.

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