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What is income from House Property?

 

Income from house property is a type of income that is earned from renting out a house or other property. The income from house property is taxable in India, and it is calculated in accordance with the provisions of the Income Tax Act, 1961.

 

Who is liable to pay tax on income from House Property?

 

Any person who owns a house or other property and rents it out is liable to pay tax on the income from the property. This includes individuals, Hindu Undivided Families (HUFs), companies, and trusts.

 

How is Income from House Property Calculated?

 

The income from house property is calculated by deducting certain expenses from the gross annual value of the property. The gross annual value is the amount of rent that the property could reasonably be expected to fetch if it were let out on rent. The expenses that can be deducted from the gross annual value include:

• Municipal taxes paid on the property.
• Interest on money borrowed for the purchase, construction, repair, or renovation of the property.
• Insurance premium paid for the property.
• Depreciation on the property.

 

What are the Deductions available for income from House Property?

 

There are a number of deductions that are available for income from house property. These deductions include:

• Standard deduction of 30% of the net annual value of the property.
• Interest on home loan up to Rs. 2 lakh for a self-occupied property under section 24.
• Principal repayment on home loan up to Rs. 1.5 lakh for a self-occupied property.
• Deduction for repairs and maintenance of the property.
• Deduction for rent paid for a second self-occupied property.

What are the Tax Implications of Selling House Property?

If you sell a house property, you may be liable to pay capital gains tax on the profits from the sale. The capital gains tax is calculated on the difference between the sale price of the property and the purchase price of the property.

Conclusion

Income from house property is a taxable income in India. The income from house property is calculated by deducting certain expenses from the gross annual value of the property. The deductions available for income from house property include standard deduction, interest on home loan, principal repayment, repairs and maintenance, and rent paid for a second self-occupied property. The income from house property is taxed at the applicable slab rates. If you sell a house property, you may be liable to pay capital gains tax on the profits from the sale.