My name is shivam sinha this is for the testing purpose
11 Feb, 2023
Income Tax! This is not something that should worry you but give you the pinch of responsibility towards the Government. The taxes collected from the common people are utilized to make overall development of the nation.
The Income Tax Act, 1961 allows us to avail Tax Deductions in various sections mentioned in the Act. Many of us are unaware of how to save taxes and avail deductions in different sectors.
House property is your home, an office, a shop, a building or some land attached to the building like a parking lot. The Income Tax Act never differentiates between a commercial and residential property. All kinds of properties are taxed under the head ‘income from house property’ in the income tax return.
When a property is used for business or profession purpose or freelancing work – it is taxed under the ‘income from business and profession’ head.
One’s residential property is known as a self-occupied house property. The taxpayer’s family can occupy the property. Vacant house property is considered as self-occupied for Income Tax.
Rented house property for the whole year or a part of the year is considered as a let out house property under income tax purpose.
An inherited property i.e. one bequeathed from parents, grandparents etc. can either be a self-occupied one or a let out one based on its usage as discussed above.
a. Determine Gross Annual Value (GAV) of the property
b. Determine Net Annual Value (NAV): Net Annual Value = Gross Annual Value – Property Tax
c. Reduce 30% of NAV towards standard deduction under Section 24
d. Reduce home loan interest through Deduction under Section 24
e. Determination of Income from house property
House owners can claim a deduction of maximum Rs. 2 lakhs on their home loan, in case the owner or the family members reside in the house property. Same applies if the house is vacant. If the property has been rented out, the entire home loan interest becomes the deduction.
However, the deduction is limited to Rs.30, 000 in the following cases:
a. The loan is taken on or after 1 April 1999
b. The purchase or construction is not completed within 5 years
The deduction to claim principal repayment is available for up to Rs. 1, 50,000 within the overall limit of Section 80C. Conditions to claim this deduction are-
A new section 80EEA is added to extend the tax benefits of the interest deduction for housing loan taken for affordable housing. The individual taxpayer should not be entitled to deduction under section 80EE.
There are various sections for Tax Deductions under the Income Tax Act. Every taxpayer needs to understand the same and implement them while filing ITR to avoid deadline.
Online Legal India ™ helps you to file ITR online with ultimate expert guidance from the team of skilled tax experts. You can enjoy the tax benefits and Deductions on any kind of house property, at a very nominal price and without any hassle
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