Business Daily from THE HINDU group of publications
Monday, Aug 06, 2007
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Business Daily from THE HINDU group of publications Monday, Aug 06, 2007 ePaper |
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Income Tax Columns - For the Asking Can I get rebate on two housing loans?
I have taken an LIG house, a 1,000 sq.ft. plot with built-up area of 225 sq.ft., from a housing board . Then I remodeled the house taking a bank loan in January 1999 and completed the ground floor that October. With a second loan taken in 2001, I completed the first floor in 2002. My family lives in the house. I am a government employee and work in another town. Can I get I-T rebate on interest and principal of the two loans that amount to Rs 5 lakh? K. C. Panda, email
You may have to contend with Clause (B) of Section 80(C) that says no to loans taken for repairs and additions after completion certificate is given by competent authority. I am afraid the Income-Tax Department may be disinclined to grant deduction even for the first loan because evidently it was taken after the housing board had taken such certificate. But if you can prove that the addition of the first floor has actually resulted in a new house, independent of the ground floor, then your second loan may pass muster. However, in that case, your claim for exemption of the entire house property from taxation on account of self-occupation would fall flat — the tax authorities would ask you to choose one of the floors with the other being treated as deemed to be let-out property and assessed accordingly. In any case, one cannot claim deduction for the principal in respect of more than one house as is evident from the language of Section 80(C)(xviii). Interest however comes for a more liberal treatment, but the interest on the self-occupied portion is restricted to Rs 30,000 if the borrowing was made before April 1, 1999. You would be eligible for a higher limit of Rs 1.5 lakh if the loan was taken after that date provided the construction was completed within three years from the end of the financial year in which the loan was taken. If, however, a portion of the house is treated as deemed to be let out, no such limit applies to that extent because there is absolutely no restriction on the qualifying amount of interest in respect of let-out houses. Interim dividend
How much interim dividend can be paid? Amornrat Kaewsuntronchai, email
A company can pay interim dividend subject to availability of profit after providing for depreciation. Just as sky is the limit for final dividend, there are no limits for payment of interim dividend either. But every management makes sure that the initial rosy picture warranting payment of interim dividend would endure throughout the year so that things don’t go sour in retrospect. S. MURLIDHARAN
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