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Income Tax efiling in India for FY 2023-24 (AY 2024-25)

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Income from House Property and Taxe

Budget Review 2021: It is proposed to exempt seniors from completing income tax returns if pension and interest income is their only annual source of income. Section 194P was recently introduced to force banks to withhold tax on older persons over 75 pensioners and interest from the bank.

Property tax: having a house for one day - everyone dreams of this, saves this and hopes to achieve this one day. However, owning a home does not mean that you have no responsibility. Paying rent a year is one of them. If you want to learn how to save on tax on mortgages, this guide is for you. It also discusses how to report home ownership to your income tax administration.

Basics of House Property Tax

A house building can be your home, office, shop, building or a place connected to a building such as a car park. The Income Tax Act does not distinguish between commercial and residential property. All types of property are taxed under the heading ‘income from property’ in return for income tax. The owner for the purpose of income tax is its legal owner, a person who can exercise the rights of the owner himself and not on behalf of another person. Where the property is used for business or professional purposes or to earn a living - it is taxed under ‘business and employee income’. Repair and maintenance costs are allowed as business expenses.

a. Self-Occupied House Property

Personal property is used for personal purposes. This could be a taxpayer family - parents and / or spouse and children. An unoccupied house building is considered to be self-contained for the purpose of Income Tax.

Prior to FY 2019-20, if more than one residential property is owned by a taxpayer, only one is considered a residential property and the rest is considered to have been evicted. Choosing which location to choose as a resident rests with the taxpayer.

In FY 2019-20 onwards, the benefit of viewing these houses as individuals has been expanded to 2 houses. Now, a homeowner can claim 2 of his or her living quarters as a residual income for the purposes of Income Tax purposes.

b. Let Out House Property

A rental house for a year or part of a house is considered a rented house for the purpose of income tax.

c. Inherited Property

Inherited property ie bequeathed to parents, grandparents, etc., may also be your property or disposal based on its use as discussed above.

How to calculate Income From House Property

Here is how you compute your income from a house property:

Frequently asked questions

Yes, a property is taxed on the basis of its annual rental income.

Krishna Gopal Varshney

Krishna Gopal Varshney co-founder & CEO of Myitronline is amongst the top emerging startups of Asia and authorized ERI by the Income Tax Department. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. ”

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