Some Finer aspects of Income Tax savings - Part 1

While most of you would be aware of the benefits of Section 80C and the fact that upto Rs 1 Lakh invested in Mutual funds or PPF, or PF or payment of insurance premiums etc, there are some other ways to pay lesser income tax and that is what i am going focus on.

Now a days, many people have bought houses and would be claiming the deduction upto Rs 1.5 lakhs for the interest paid in the case of self occupied houses.

However, there are many who have more than one house. In those cases, one can offset expenses made to maintain that house in the form of maintenance fee, interest paid against the borrowing etc and only pay the tax for the net amount. Also, there is no limit on the amount of deduction for the interest paid on the borrowings.

Say one has an income of Rs 1 lakh from an house property but has paid more than Rs 1 lakh in the way of interest for the borrowing made to buy this property, then the next loss can be offset against the income made by the person and shown as loss from the property. However, one cannot show any loss till such time that the house is completed or possession/registration taken for the house.

So go ahead and claim the loss if any or atleast end up lesser tax on the rental income in the case of the purchase of a house from borrowed money.