Do remember to obtain and keep a certificate of interest payment from your lender for each such year in which you pay the interest. You may need it at the time of claiming the deduction.

I have taken a home loan in the year 2006 for the purchase of a house where my parents and sister are living now. The loan is in my sole name. I stay in a rented home in some other city due to my job. Will I be taxed in any way for owning the house? Can I show the home loan for getting the tax exemption on principal and interest paid?

(Via Email)

The income tax law specifies that if you own a house that could not be occupied due to your employment in another city and no other monetary benefit is derived from such house, then you are entitled to claim the same as self-occupied. The annual value (value for the purpose of income tax) shall be taken as NIL and it shall not be deemed to be let out as well.

You can claim the income tax benefit on the home loan repayment as you have been doing so every year.

The author is a chartered accountant.

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