Income from Let out House Property

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Hiral Vakil

Income from House Property
Income Heads
Section 80EE

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:

  1. Self-occupied House Property/ Permanent Residency
  2. Let out House / Rented Property
  3. Deemed Let out House Property/ Vacant House
Earned Income from House Properties?
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How to Calculate Let Out House Property Income?

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Particulars Self-Occupied Let Out Deemed Let Out
Gross Annual Value (Total Rent Received/ Receivable) NIL XXX XXX
Less: Municipal Taxes Paid Not Applicable

(Actual Tax Paid Amount)

(Actual Tax Paid Amount)
Net Annual Value (NAV) NIL XXX XXX

Less: Deduction u/s 24 of Standard deduction at 30%

Less: Deduction of Interest on Housing Loan 

Not Applicable 

 

 

(XXX) (Rs.2,00,000)

(XXX)

 

 

(No Limit) (XXX) 

(XXX)

 

 

(No Limit) (XXX) 

Income from House Property  (XXX) XXX XXX

 

Benefit of Co-ownership of Property

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.

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FAQs

Which ITR needs to be filed for Rental Income?

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.

Can I carry forward the loss from House Property Income?

Yes, you can carry forward the loss for 8 years. It can be set off against House Property Income only.

Who is deemed owner?

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.

Is rental income from sub-letting chargeable to tax under the head “Income from House Property”?

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.

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