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Tax4india ›› House Property Tax India›› Hints For Tax Planning House Property Tax
Hints For Tax Planning House Property Tax
- In case a person has more than one house properties, all of which are self-occupied, he should opt for that property whose rateable value as per municipal records is highest to be treated as self occupied. The other properties may be treated as deemed to be let out and taxed at a lower figure.
- Expenses such as municipal taxes and property taxes which are allowed as a deduction only on payment basis must be paid during the relevant previous year.
- Since interest paid outside India is allowed as a deduction only if tax has been deducted at source, adequate tax must be deducted on such payments in order to claim deduction.
For example A owns two houses, I & II. House I is let out throughout the previous year. House II is self occupied for nine months and let out for three months on a monthly rent of Rs5,000. Determine Taxable income, given the following details:-
|
House I |
House II |
| Municipal Value |
40,000 |
50,000 |
| Fair Rent |
50,000 |
48,000 |
| Rent Received |
48,000 |
15,000 |
| Municipal Taxes paid |
4,000 |
5,000 |
| Insurance Premium (not yet paid) |
2,000 |
2,500 |
| Ground Rent |
1,000 |
1,500 |
| Maintenance Charges |
3,000 |
3,500 |
| Electricity Bill |
5,000 |
6,000 |
Statement of Income
|
House I |
House II |
| Gross Rental Value (For House II @ 5000 * 12) |
|
40,000 |
|
60,000 |
| Less : Municipal Taxes paid |
-4,000 |
|
-5,000 |
|
| Net Rental Value |
|
36,000 |
|
55,00 |
| Less : Adjustment for Self-occupation |
| | | |
| (55000/12*9) |
0 |
|
-41,250 |
|
| Net Adjusted Value |
|
36,000 |
|
13,750 |
| Less : Deduction u/s 24 |
| | | |
| Repairs & Collection Charges(1/4) |
|
-10,800 |
|
-4,125 |
| | | | |
| Taxable Income |
|
25,200 |
|
9,625 |
|
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