tax exemption?

Question

kindly clarify
I work in calcutta and have two properties in chennai,
1. Whether I can claim interest deduction for the both flats (one is self occupied and another is let out, both are acquired by borrowed capital). 2. Is it also possible to buy another flat in Kolkata and claim interest reduction on the basis of self occupation (meaning I will have two self occupied houses and one letout property)

Answer 1

Dear Mr. Vij
The income tax act,1961 allows one assesee to keep only one residential property as self occupied. In your case it is like one self occupied property in chennai can be allowed for deduction of interest on money borrowed for house property upto Rs.150,000/-. While on the second property in chennai you can take as much deduction of interest as you are paying. But do remember to show the rent receipt as your income from that property. but if you wanna purchase a new property in kolkatta for sheer tax planning, it would be a waste. also as per income tax, the annual value of your proposed property in kolkatta will include in your taxable income.
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