Suresh borrowed money from the bank to fund his home purchase in Nagpur last year. He has been living with his family in the house. Let's see how income from property is calculated.
Suresh made an interest payment of Rs.2,16,000 this year and spent Rs.10,000 on repairs. He paid the municipality Rs.8,000 in property taxes.
Suresh's income from house property is zero because he has been living in this house throughout the year. Section 24 of the Income Tax Act lets Suresh claim a maximum deduction of Rs.2,00,000.
Suresh makes a loss on this house property as calculated below.
|Gross Annual Value||0|
|Less: Property Taxes||0|
|Net annual value||0|
|Less: Interest on money borrowed||-2,00,000|
|(Loss) on house property||-2,00,000|
This loss can be deducted from Suresh's income from other heads for the year.Read more about income from house property on our house property guide.
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