A house claimed by an income tax survey, regardless of whether it is self-occupied or rental, should be reported at the time of filing income tax return. House property income is a different head of income which is eligible for extraction, depending upon whether the house is self-occupied or rented.
Self-occupied or rental house
A house property is termed as ‘self-occupied’ when the proprietor or their relatives use it for private purposes. A house could be as termed as ‘self-occupied’ even in a circumstance where the house was not occupied during the said time because of the proprietor had work elsewhere. Additionally, if an individual claim a house but lives with guardians, it might be named as ‘self-occupied’ on the off chance that it was not leased.
In the income tax return, under the head ‘Earning from House Property’, one needs to choose the kind of house property – self-occupied or rented out. Subsequent to choosing ‘self-occupied’, the yearly estimation of one’s occupied house is taken as zero.
Interest paid on a loan taken for a self-occupied house is a qualified source under this category of income. The amount paid as interest on the loan can be entered here. The present greatest limit for a self-occupied house is Rs 2 lakh. The structure will enable a limit of this add up to be entered, regardless of whether the real interest paid is higher.
Since the yearly estimation of self-occupied property is set to zero, the interest paid amount will show up as a negative amount which will be balanced against different heads of pay like compensation or salary from different sources. Therefore, the gross salary which is liable to tax will lessen to that extent. In a circumstance where the individual has no other pay, the loss can be conveyed forward.
Things to Remember
The term ‘House property’ incorporates any building and land apartment which an individual claim.
In the event that the property possessed by the individual is utilized for the purpose of business, it should not be categorized as income from house property.