Homeownership is an eternal dream of the Indian middle class. As more and more of us own our primary residence and some even rent out secondary properties, which is Let Out House Property. It is important to under tax implications. House Property Income can be classified into 3 categories as per Income Tax Act:
When two or more people jointly own a property they are called co-owners. If it is co-owned then such income is taxable in the hands of each co-owner as per their respective ownership percentage. This is a great way to save taxes.
Rental Income is considered under the head “Income From House Property”. And ITR 1 needs to be filed if only one house is owned. Otherwise, ITR 2 needs to be filed.
Yes, you can carry forward the loss for 8 years. It can be set off against House Property Income only.
The deemed owner is the person who is getting rental income but is not the actual owner. Following are the deemed owners:
1. Spouse of a person to whom ownership is transferred without any monetary consideration,
2. Minor Child of a person to whom ownership is transferred without any monetary consideration.
No. Any income received by a tenant from sub-letting is not taxable under this head. It is taxed under the head “Income from other Sources” or “Profit and Gains from Business or Profession” as the case may be.
No. You cannot claim expenses on a Self Occupied Property. However, if you have a property loan, you can claim the Interest paid on such loan as an expense under the head Income from House Property in the ITR. You can claim expenses on a Let Out House Property.