Taxation of Income from House Property

Income Tax Income from House Property
21

I have two properties, one in the city and the other in a suburb. Do I have pay any IT on it? As per my information, from AY 2020-21 exemption is allowed on two self-occupied properties. Can you throw some light on this section. Does this have to be shown during the ITR filing?

22

Hello @Girimon_Vasudevan !

From AY 2020-21, if a taxpayer owns multiple house properties, the Income Tax Act has allowed the benefit of declaring any two properties as ‘Self-occupied property’ as per his willingness and rest of the properties will be treated as ‘Deemed to be let out’; the annual value of the deemed to be let out property will be taxable under the head Income from house property and is derived according to section 23(1)(a) of Income Tax Act.
You can read more about it over here

Hope this helps!

24

Hello @Nishit0612,

Under section 54 of the Income Tax Act, if the assessee has earned Long term capital gain on the transfer of residential property and a new residential house is purchased within 1 year before or 2 years after the date of transfer then exemption can be claimed.

LTCG and its exemption both will be calculated proportionately as per assessee’s share in ownership.

To read more about it you can refer to this article: Capital Gain Exemption under the Income Tax Act - Learn by Quicko.

Hope this helps!

25

which date should i take as the base for the period calculation if the transaction happened 5 installments .
?

the 1st installment date or the last installment date or the date on which the maxim transaction took place or the date on which the lowest amount transaction took place ?

26

Hello @HIREiN,

The date of sale agreement will be considered as date of transfer of capital asset.

27

the date which is written on the paper or the date on which it is signed or the date on which it is registered in the registrar office ?

28

if i own more than 2 residential properties then in 1 property i have to bear rent notional income and pay tax on that .
does this rule also apply to the commercial properties ?

29

Hi @HIREiN

This rule is applicable to commercial properties as well.

30

if husband and wife own 4 properties in joint names . then ; in actually ; reality ; they own 2 properties each person .
so notional rent will not be applicable in such scenario .
am i right ?

31

Hello @HIREiN,

No, any individual can report a maximum of 2 properties only as Self Occupied even if it’s co-owned.

32

so , is n’t it a better idea to own 2~2 properties separately/individually by the husband and wife each one . rather than owning the 4 properties jointly ?
@Shrutika_Shah
@Bharti_Vasvani

33

Hi @HIREiN

Yes, you’re right. It is better to own 2 properties individually to be able to claim 2 properties as self-occupied.

34

If this is so . Then . But .
Why do most of the buyers buy in joint names ? And always keep 1st name of the female in the agreement ?
Is Keeping 1st name of female member in joint property ownership gives any advantage ?

Is there any catch ? Is there any benefit ? Or am i missing something to undetstand ?

@Shrutika_Shah
@Bharti_Vasvani

35

Hi @HIREiN,

For taxation purpose, joint owners of house property have a proportionate liability of tax and advantage of deductions. There is no additional benefit if 1st name is of a female member or not.

Hope this helps!

36

My wife getting rental income of the house from this year onwards Rs 25K. 3 Months rent payment she waived due to flooding last year. Actual rent received / receivable will be only 9 months from April 2023 to March 2024. Do we need to take full 12 months rental income or actual received ? for the Income Tax filing purposes as income from HP. Please clarify.

37

Hi @Srikanth,

Only the amount actually received as rent needs to be reported as income.

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38

Thanks a lot maam for your clarification. Much appreciated

1 Like