1 / 13

Income from House Property and Taxes

It's a platform where people can easily generate income from house property and Taxes.

15733
Download Presentation

Income from House Property and Taxes

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Income from House Property and Taxes Jaipurrental.com

  2. Basics of House Property Tax The Income Tax Act does not differentiate between a residential and commercial property. A house property could any of the following: • Residential Property • Commercial Shop • A Building • Hostels • Land attached to the building like a parking lot

  3. Any property that is used for the business or carrying our freelancing work is taxable under the 'income from business and profession' head. Expenses incurred on property repair and maintenance is considered as business expenditure.

  4. Self-Occupied House Property A self-occupied house property is used for one's own residential purposes. This may be occupied by the taxpayer’s family – parents and/or spouse and children. A vacant house property is also considered as self-occupied for the purpose of Income Tax. A homeowner can claim his 2 properties as self-occupied and remaining house as let out for Income tax purposes.

  5. Let Out House Property A residential property which is used for the rental purpose, either whole or parts of the property for the entire year or part of the year is considered a let out house property for income tax purposes.

  6. Inherited Property An inherited property i.e. one bequeathed from parents, grandparents etc. again, can either be a self-occupied one or a let out one based on its usage.

  7. How to calculate Income from House Property

  8. Calculate Gross Annual Value (GAV): The GAV of a self-occupied house is nil (zero). If the owner has property in some other city and he is living in a rented house in another city for employment purpose, the annual value will be considered as nil. For a let out property, it is the rent collected for a house on rent.

  9. Deduct Property Tax • Property tax, when paid, is allowed as a deduction from gross annual value of the property.

  10. Calculate Net Annual Value =Gross Annual Value – Property Tax

  11. Deductions under Section 24 • Standard deduction: 30% on NAV is allowed as a deduction from the NAV under Section 24 of the Income Tax Act. • Interest on borrowed capital or home loan interest: Deduction under Section 24 is also available for interest paid during the year on housing loan availed.

  12. Loss from House Property • When you own a self-occupied house, since its GAV is Nil, claiming the deduction on home loan interest will result in a loss from house property. This loss can be adjusted against income from other heads.

  13. Example

More Related