I have an ancestral property (from my father’s side) registered in my name. Though it’s rented, I show it as my place of residence in all official documents. I have also purchased a second property via a home loan and intend getting yet another one soon. I want to know the implications of this on my income tax (income from house property) now and after acquisition of a third property. Also, I have misplaced the registration copy of my first property. Can I get an additional copy from the local registration office or will I have to submit additional legal documents?
— Rakesh Baweja There is no restriction on the number of properties in respect of which a person can avail income tax benefits. However, in case a person owns more than one property and it is either occupied by him or his relatives, the person gets the option to treat one of the properties as self-occupied. Once the option to treat a particular property as self-occupied is taken, the other property will be deemed to have been let out and a notional income equivalent to the rent expect- ed to be realised. The actual rent on such property will be treated as rental income in respect of the other property.
The annual value of the self-occupied property is taken at nil and a person is entitled to claim interest payment for loan taken to acquire that property of up to a limit of ₹ 2 lakh. You can also claim income tax benefit towards repayment of housing loan on both properties put together within the overall limit of ₹ 150,000 under Section 80 C.
All taxable income of the second and the third property will be arrived at by deducting actual interest payable in respect of such property without any limit from the notional/actual rent taken above as well as 30% standard deduction.
You will be able to claim tax deduction benefits under Section 80C in respect of the stamp duty paid in respect of the third property also within the overall limit of ₹ 150,000. This benefit is available during the year in which you pay the stamp duty.
As far as lost documents are concerned, you will have to reapply for those documents. However, this is a cumbersome, time-consuming and costly affair. You are unlikely to need them for income tax purposes but will require them if you intend selling the property. I have a home loan account with a bank. In 2012, the sanction interest rate was 11.50% (BR 11.25+0.25). But in the very next year (2013) the rate got revised to 10.50% (BR 10.25+0.25). However, I got no benefits, post the revision. I want to know whether the bank is bound to implement the revised interest rate for existing customers?
— Nandini Das If the bank has reduced the base rate, it will have to reduce the interest rate applicable to you as well. But please check whether the interest benefit has already been given to you even though the EMI has remained the same.
The best way to ascertain the effective rate of interest is to ask for amortisation schedule (break-up of each installments into principal and interest component) on your home loan. There are possibili- ties that the bank may have kept your EMI the same and reduced the tenure of the loan. You can approach the branch manager of the bank from where you have taken the loan and ask them for the clarification. If the bank has failed to pass on the benefits of lower interest rate, you are not satisfied with the response, you can address your grievance to the nodal officer of the bank.
If you are still not satisfied with the response from the bank or do not get any response within four weeks, you should file a complaint. with the banking ombudsman on the RBI website.