Income tax fy 2011-12

i possess an old house , present evaluation approx 14 lakhs, i have shown it as self occupied.

new house purchased for rs 52 lacs has an EMI of rs 50,000 commenced from jun 11 for a period of 65 months…. my net taxable income is approx nine lacs appreciating @10 % annually.

if i show the second house as self occupied then what is my liability on the first house? if first house is to be shown as on rent what is the minimum value ( occupied by my mother) to be included in as income for tax purpose? I am made to understand that on a self occupied house max rs 1,50,000 interest component is considered for rebate.
if i show the first house as self occupied then what is my tax liability on the new house ? if i have to show it as on rent what is the minimum value to be shown as rent? I am made to understand that in this case entire amount of interest component (approx 4.0 lacs) is admissible for rebate.

if i show the new house on rent then will my complete interest component (approx 4 lacs in current year) be considered for rebate?

kindly suggest various options and implications.



Admin’s Response:

The house is either self occupied or on rent. As per provisions of Section 24 of Income Tax, the max. amount claimable on interest on loan is Rs. 1.50 lacs in a year. The entire amount of interest is adjustable if the house is on rent and the entire interest component is claimable as per the provisions of the Act.