Deduction - vacancy allowance

[sunil mehta]

A person having more than one residential house property is free to choose one of them as 'self occupied house property' and treat the other as 'deemed let out property'.If the deemed let out propert is in the city other than at a place where he carries on his business and that deemed let out property is not let out at all during the fin.year,whether the asseessee is entitled to take deduction of 'vacancy allowance' for computation of his house property income? 2)Will it make difference if the asseessee sometimes occupies that'deemed let out property' whenever he goes to that city during the year?

[Ravi Chopra]

See the provisions of section 24(1)(ix) of the Income Tax Act, which suggests that property eligible for vacancy allowance must be remain vacant for part of the year. Means thereby, if the property is vacant for the whole of the year, the benefit of vacancy allowance would not be allowed. There is difference if he occupies that property for own use (self occupied property) for part of the year.

AI Summary

Vacancy allowance denied where a deemed let out house remains vacant whole year; part year occupation can affect entitlement. Eligibility for a vacancy allowance for a deemed let out house depends on vacancy for part of the year; a property vacant for the entire year does not qualify, whereas part year personal occupation changes the vacancy period and can affect entitlement.