c. Income from House Property
I have paid property tax for the past years in this year. Can I claim deduction for entire amount of property tax paid?
Yes. You can claim deduction for entire amount of property tax paid. The deduction on account of property tax is on a payment basis and not on the basis of charging year of such property tax.
I have received rent due for the past period in the current financial year. How do I offer it to tax?
If you recover any rent that was not previously realized, then such unrealized rent shall be taxed in the year in which such income is realized by you (whether or not you are the owner of that property in that year) after deducting a sum equal to 30% ...
My spouse and I jointly own a house in which both of us have invested equally from individual and independent sources. Can we split the rental income received between the two of us to be taxed in individual hands?
Yes, Rental Income received by each co-owner can be taxed proportionately and taxed in the hands of both independently as per your share in the said property.
I have given my shop on rent and I also facilitate services like providing of computers and other ancillary services to the tenant. I receive rent from the tenant which includes service charges. How should it be brought to tax?
In such cases, the best approach would be to bifurcate the rent amount into two categories ---‘rent’ and ‘service charges’. The amount of rent received is to be charged as Income from House Property and the amount of service charges received is to be ...
While computing income chargeable to tax under the head “Income from house property” in case of a let-out property, how much interest on housing loan can be claimed as deduction?
In case of a let-out property, there is no limit on the quantum of interest which can be claimed as deduction while computing income from house property.
For construction or buying a house, I have borrowed loans from friends and relatives and not borrowed home loan from bank. I am paying interest on such loans but not in the form of EMIs. Can I claim deduction on account of such interest paid?
Yes, as the source of the loan does not matter. However, the loan must be taken and utilized for purchase, construction, acquisition, renovation or repair of the house property. The person from whom loan is taken and to whom interest is paid must be ...
I have rented out a part of my house property and I stay in another part of the same house property. In such case, how will the income be computed?
In this case, the two parts of the house shall be considered as independent house properties or taxable units. · The part in which you are staying shall be treated as a self-occupied property and the income shall be computed accordingly. ...
I have received possession of a house in October 2018. Thus I have held the property only for a period of six months. This property was not given on rent and was vacant. I must compute the expected amount of rent that I might have received if the property would have been given on rent. The expected
No. In case of the property which is considered as deemed let out, the annual value of the property is to be computed for the entire year and not for the part of the year. Therefore, the annual value of the property shall be Rs.120,000/-.
How do I compute income from a property which is self-occupied for part of the year and let out for part of the year?
Such a property will be treated as been let-out throughout the year and income will be computed accordingly. However, while computing the taxable income in case of such a property, actual rent will be considered only for the let-out period.
I own two houses. One is a farmhouse that I visit on weekends and the other is in the city that I and my family live in. Is it correct to treat both these residences as self-occupied?
No. In such a case, one of the houses of which the income is higher as compared to the other, shall be treated as a self-occupied house, while the other would be treated as a deemed let out. For the latter, the annual value shall be taken as the ...
What will be the tax implications if I occupy more than one property for my residence? Can I treat all these properties as self-occupied and compute income from them at NIL or Zero?
If the person has owned more than one self-occupied property, only one of them will be treated as self-occupied & the others will be treated and taxed as deemed to be let-out properties. The taxpayer can claim GAV as ‘Nil’ only for the one house ...
How do I compute income from self-occupied property?
The gross annual value of the self-occupied property is ZERO or NIL. Accordingly, the standard deduction at 30% of the annual value shall also be ZERO or NIL. Therefore, the amount of interest paid by the person against home loan shall be the loss ...
How do I compute the Gross Annual Value (GAV) of the property which was vacant throughout the year?
In such a case, the GAV of the property shall be the annual expected rent from the property. The annual expected rent of the property shall be computed in following manner, depending on whether or not the property is governed by The Rent Control Act: ...
How do I compute the gross annual value (GAV) of the property which is vacant only for some time during the year?
In this case there can be two scenarios: The amount of actual rent received for a part of the year is less than the Annual Lettable Value (ALV) (expected rent or potential rent) The amount of actual rent received for a part of the year is more than ...
What is the Annual Lettable Value (ALV) of the property? How is it computed?
This is the amount for which a particular property is expected to be given on rent in a particular year OR an amount of potential rent. This is also known as ‘fair value of rent’, ‘expected amount of rent’, etc. It is computed as annual value ...
Under which head is the rental income from a shop charged to tax?
Shop being a building, rental income received from a shop is charged under Income from House Property.
What is meant by the annual value of the property?
This is the term used in the Income tax Act for computation of income from house property. It is the amount which can be yielded from the property in a year as income, as rent, service charges, etc. This is the starting point for computation of ...
How is the income from house property computed?
The income from house property is computed after making certain deductions to the annual value or annual lettable value of the property. The first and most important step is the computation of annual value (AV) or (ALV) of the said property. The ...
How is income from a house property as per the Income tax Act different from the ‘rental income’ received from house property?
The rental income is received by a person against renting out of his property. The computation of income from house property is NOT solely dependent on this rental income. If you are not receiving rental income, it does not mean that the House ...
I have transferred my house property to my minor child who is not married. In whose hands will the income from the house property be taxed?
As per section 27(i) of the IT Act, you shall be the owner of the house property and hence the income shall be taxed in your hands.
I have transferred my house property to my spouse as per the terms of the agreement of living separately from each other. In whose hands will the income from the house property be taxed?
As per section 27(i) of the IT Act, your spouse shall be the owner of the house property and hence the income shall be taxed in her/his hands, since the property stands transferred in connection with an agreement to live apart.
I have transferred my house property to my spouse through a gift. We are living together and not separated. In whose hands will income from the house property be taxed?
In such a case, you shall be the owner of the house property and hence the income shall be taxed in your hands. (Section 27(i) of the I T Act)
Can rental income on a property be taxed in the hands of a person who is not a registered owner of the property?
The income or receipt can be taxed as ‘income from house property’ only when you own the property and you are entitled to legally receive income from such property.
I am not the owner of the land on which I have constructed the house. But as per municipal records, the house is in my name. Is the income taxable in my hands?
You need not be the absolute owner of the house property. It will suffice if you are the beneficial owner and are entitled to receive the income from such house property. This income is liable to be taxed in your hands as income from house property. ...
I have rented a property from someone and since I could not occupy that property or could only partly occupy, I have sub-let the property to a third party in exchange for a receipt of income. Is this receipt taxed as house property income?
The income or receipt can be taxed as ‘income from house property’ only when you own the property. This property is not owned by you and you are not entitled to legally receive income from such property. You are the tenant in the said property. ...
I own a property that I have not given on rent. It is vacant and I don’t earn income from this property? Can there be a taxable income from such property?
Yes. As per the Income tax law, if there is a property, there will be income. This income may be NIL or negative or positive. But there shall be income computed as per the applicable provisions. This may result in NIL income or loss or taxable ...
What is the meaning of self-occupied property (SOP)?
A self-occupied property is the one which is used by the person for his own residential purpose. If the person owns more than one self-occupied property, then only one property will be treated as self-occupied and the other will be considered as the ...
When can my earnings be treated as ‘income from house property’?
Three conditions are necessary to bring income under the head, ‘Income from House Property’: There must be a property consisting of building or building with a connected land. The building means bungalow, shops, gala, flat, apartments, factory ...
What is classified as “Income from house property”?
When you own a property, which may be a building, flat, house, bungalow, gala, factory building or a shop, it may or may not yield a rental income. Such income which you have received or could have received if the property was given on rent is ...
What is considered ‘House Property’ for the purpose of Income Tax?
‘House Property’ implies ‘a building or buildings with lands connected thereto’. It means that it should be a superstructure which is capable of occupation, and the building must be the most prominent part of the said property comprising of land and ...