Your home, your office, or even a shop can be your house property. According to the Income Tax Act, there is no differentiation between a commercial and a residential property. Every property is taxed under the single head of ‘income from house property.’ Here is all you need to know about income from house property.
If a property is used for your residential purposes, it is a self-occupied house property. A vacant house property is also considered as self-occupied and if you own more than a single self-occupied property, only one will be considered as self-occupied and the other one will be assumed as let out.
This is a property, which is rented for the entire year or for a part of the year.
An inherited property could either be self-occupied or let out.
Its not necessary to pay tax on the entire Income from the house property. There is a standard Deduction of 30% of Income from the house property also you can deduct the Interest paid on such Income subject to maximum limit of Rs 2,00,000/- and then you can also deduct the property tax paid on such property from the rental Income received for that property.
For a self-occupied house, the Income from House Property will be negative, Because you can deduct your Interest paid on Loan Amount and also your Property tax paid, which means there will be a loss from house property. This loss can be adjusted against income earned from other heads.
You can claim a deduction of up to INR 2 lakh on the home loan interest if you reside in the house property.
There is a maximum tax deduction of INR 1.5 lakh available on the principal repayment within the limits of Section 80C. However, the loan must be for the construction of a new property or purchase of a new property, and it should not be sold in a period of five years from the purchase date.
The government has made it convenient for homebuyers to apply for a loan and repay the same over a period. This has enabled many first time homebuyers to own property under their name. The first-time homebuyers also get a benefit of up to INR 50,000 under Section 80EE of the Income Tax Act, which is a separate and exclusive deduction offered for the purchase.
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