ET Online. This is also important for tax saving if you want to set off the interest you are paying on any home loan taken for the same house against the income from house property. A person's gross total income chargeable to tax is a sum of income under various heads such as 'income from salary', 'income from other sources' etc. One of these heads of income is 'Income from House Property'. While filing returns for the FY , an individual is required to provide the break-up of the income from house property.
What is income from house property Income from House Property covers the rent earned from the House property which is chargeable to tax. Sometimes, the owner may have to pay tax on ' deemed rent ' in case the property is not let out. The assessee is the owner of that property. The property may be used for any purpose except used by the owner for the purpose of running his business or profession.
Read this article in : Hindi. Sujeet Kumar days ago. Rajendra Vitthal Ishi days ago. Swaminathan Venkataraman days ago. OFFHAND The points made and canvassed for, by some of the readers against taxation of notional income in respect of any HP vacant during the whole of the previous year, are prima facie quite sensible and legitimate. Prabha Sanghi''s case; in which the Bench has analyzed in great details the governing provisions of the IT Act. May be worth finding out whether there has been any other case law,subsequently for or against the proposition sought to be canvassed, if so decided, for filing the tax return for the AY In this context,needs to be pointed out that, it might be worth examining, insight-fully, the implications of certain quite recent amendments of sec 23 and sec 71,as are made applicable for AY ; in case those are of relevance and help, directly or indirectly, to the points of concern herein.
View Comments Add Comments. Browse Companies:. To see your saved stories, click on link hightlighted in bold. Find this comment offensive? This will alert our moderators to take action Name Reason for reporting: Foul language Slanderous Inciting hatred against a certain community Others. Your Reason has been Reported to the admin. However, if the taxpayer uses this property for operating or running a business or profession, it will not be taxed as income from home property. Annual value: This is the actual rent received or to be received by the property owner on renting out the house.
Municipal value: This is the value on house property as calculated by the municipal authorities for imposing municipal taxes. Fair rent value: Fair rental value is the rent which a similar property with similar features in the same locality would fetch. Standard rent: The standard rent is determined under the Rent Control Act. If the standard rent has been fixed for any property under the Rent Control Act, the property owner cannot charge a rent higher than the standard fixed rent.
Deductions: To ascertain the actual taxable income, the taxpayer can claim the following deductions under Section 24 of the Income Tax Act, This deduction will not be permitted in case the GAV is nil. Interest on home loan: Deduction can be claimed for interest on home loan under Section 24 of the Income Tax Act.
The limit under this section is Rs 2 lakhs. The purchase or construction needs to be completed within 3 years from the end of the financial year in which the loan was availed. If the house that the assesse is staying in is the only property he or she owns, the annual value will be nil. The annual value of the remaining properties will be assessed according to the expected rent if the property was let out.
There are a number of measures an individual can undertake to save tax on Income from House Property. They are:. Become co-owners: If the individual and his or her spouse have jointly taken a home loan, both can claim tax exemption towards payment of principal and interest. Thinking about getting a second home: If the assesse already has one property registered in his or her name, it is a good idea to register the second property in the name of individual's spouse or relative so as to avoid excess taxation.
Multiple properties ownership: The Income Tax Act, , states that if an individual owns multiple house properties, only one of these will be regarded as self-occupied. The taxpayer needs to evaluate the tax liability on all the properties he or she owns and occupy the one with the highest tax liability and give out the others on rent. If a property is not used for residence by the taxpayer, can he or she still treat it as a self-occupied property?
A self-occupied property is one that is occupied by the owner for his or her residence throughout the year. However, there is one way a taxpayer can treat a property he or she is not occupying as a self-owned property. If the following conditions are met, the annual value of a property will be considered nil even though the owner is not occupying it:. The owner is unable to reside in the property due to his employment, which requires him or her to reside at another place. Can tax benefits be claimed for interest paid on loans taken from friends and relatives while calculating Income from House Property?
Yes, if the loan is taken for purchase, construction, repair, renewal or reconstruction of the house, the house owner can claim a deduction under Section 24 B for the interest on home loans. It must be noted that the friend or family member who is lending will be liable to pay tax on the interest earned from the loan.
If the property owner rents out his or her property, what expenses can be deducted from gross annual value while calculating income chargeable to tax under Income from house? While calculating income chargeable to tax under Income from House Property, in case of a property rented out, the following items can be claimed as deductions from gross annual value. Professional Tax Professional Tax in Maharashtra.
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