CMA Intermediate · Direct and Indirect Taxation · Income from House Property
Ms. Kavya Nair owns two self-occupied houses, each treated as per section 21(6). Interest payable on the loan for the first house, which meets the conditions of section 22(2)(a), is Rs. 170000, and on the second house, which also qualifies, is Rs. 150000. The total interest deduction allowed for the tax year is:
The allowed deduction is Rs. 200000. Although each property's interest is below its own cap, section 22(5) limits the aggregate deduction for such properties to Rs. 200000, so the total of Rs. 320000 is restricted.
- ARs. 200000Correct
- BRs. 320000
- CRs. 400000
- DRs. 60000
Explanation
Each property is capped at Rs. 200000 under section 22(2)(a), so 170000 and 150000 are within limits individually, totalling 320000. Section 22(5) limits the aggregate for such properties to Rs. 200000. Rs. 320000 ignores the aggregate cap.
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