First the postive news ! Under the Income Tax Act 1961 , if you have more than one property, there was provison for taxing notional rent even if the second house was not put to rent. However, under the Direct Tax Code 2010 , such aconcept has been abolished.
Two of the most controversial change in taxation of rental income from house property by earlier Direct Tax Code were -proposal of tax @ 6 % of presumptive rent calculated at 6% per annum of the ratable value fixed by the local authority and abolition of any interest deduction even from one house which is self occupied by a taxpayer.
House rent allowance exemption and interest deduction including 80C deduction for payment of principal amount of loan is one of the most sought after query by readers of this blog. Therefore, when Mr Nag of Banglore asked “I have an independent home in B’lore(under bank loan) and I am staying in B’lore in rented house(3BHK). Can I claim Both HRA and Home loan interest Benefit ? Since my friends says that we...