Compare Listings

Good News for Tenants, Owners of Multiple Houses and Depositors

Good News for Tenants, Owners of Multiple Houses and Depositors

If you own more than one property, you have a reason to cheer as the interim budget proposes to treat two properties as self-occupied, which will effectively bring down your tax liability.

Currently, whether you own a single property or more than one, only one is considered selfoccupied for residential purposes. The other properties are considered let-out or deemed to be let-out and tax has to be paid on their annual values even if they remain vacant for the entire year and the taxpayer makes no gains. According to Section 23 of the Income Tax Act, the annual value is “the sum for which the property might reasonably be expected to let from year to year”.

The finance minister has relaxed this rule and proposed that from fiscal year 2020, two properties will be considered self-occupied and, thus, won’t attract tax. “Considering the difficulty of the middle class having to maintain families at two locations on account of their job, children’s education, care of parents etc., I am proposing to exempt levy of income tax on notional rent on a second self-occupied house,” said the finance minister.

Most experts believe it to be a good move. “This is in line with the real income principle that notional income should not be subject to tax and also avoid litigation and ambiguity regarding computation of annual value,” said Suresh Surana, founder, RSM Astute Consulting Pvt. Ltd, an auditing and accounting firm.

However, if you own more than two houses, you will still have to calculate the annual value of properties in excess of two houses.

The annual value is the potential rent of a property if it was rented out. To calculate it, you need to consider the higher of the standard rent if the property lies under the jurisdiction of Rent Control Legislation or rent based on the municipal value of the property or the rent equivalent to the rent received on other similar properties in the locality.

Once the annual value is calculated, you may be allowed to claim deductions such as taxes paid to the municipal department, standard deduction and interest paid on home loan.

The budget has also proposed a hike in TDS (tax deducted at source) limit on your deposits in banks and post offices. No tax will be deducted on interest income up to ₹40,000; the current Tds-free limit is ₹10,000. To be sure, these measures will not lead to additional saving for taxpayers.Shaikh Zoaib Saleem contributed to the story

Source : HT


Axiom Landbase

Related posts

Signature Global to launch Rs 8,500-cr realty projects in FY23-24 acquires 25.14 acres in Gurugram

Real estate company, Signature Global on Monday also said that it comes with the new group housing...

Continue reading
by Axiom Landbase

Vatika Chowk Underpass Inaugurated, SPR Repairs to Begin

The highly anticipated underpass at Vatika Chowk has finally been inaugurated by Chief Minister...

Continue reading
by Axiom Landbase

Realtor Anant Raj Aims To Generate Rs 500 Crore By Issuing Securities

Realty firm Anant Raj Ltd has recently devised a plan to raise Rs 500 crore through securities...

Continue reading
by Axiom Landbase