Understanding the Income Tax Rules for the properties you own
Know your tax rebates and liabilities
The best investment for anyone in the recent times is the real estate investment. Thus, with the onset of more and more people investing in the Real estate market there has been introduction of laws for multiple property ownerships.
Now, to understand what will happen if you own two properties and how the tax will be levied at your real estate property. Let us look at details provided below:
What are the Income tax laws for people who have multiple houses?
In simplest terms, if the investor has more than one property then additional property which is not self-occupied becomes taxable. That means that if there is one house which is the primary house (where the individual is living with family) and there are other houses which are rented to others. The primary house will not be taxable but the other rented houses will be taxed.
To elaborate this, let look at the Income Tax Act, 1961, which specifies that the self-occupied house of the individual will not be tax chargeable house as the tax payer will be charged “Nil†for that property or a relaxation of up to 2 lakhs will be given to the individual with respect to interest on housing loan under section 24(b). In that case the other property which is “deemed to be let out†on that property there will be a tax that will be paid on that property on the annual value of the house. For the calculation of the annual value the candidate is allowed certain deductions such as construction, repair and renewal cost of the property. Laws assumes that the additional property is out for rent and taxes the income that you earn from that house.
In this case, it is also important for the investor to understand that one person is exempted from the tax for one property even If the candidate is not living in that property and is living in a rented accommodation due to work in any other city.
Pinnacle homes can help you in your tax related issues
If you own multiple properties or you are planning to invest in few more properties than Pinnacle Homes is the ideal mentor to help you understand your Tax rebates and labilities. We provide consultancy based on your needs and help you take the correct decision. To contact us for queries you can write to us at info@pinnacleproperties4u.com