With the deadline to file your income tax returns fast approaching, here are some points you need to consider regarding income from property and capital gains tax
The deadline for filing income tax returns is fast approaching. Many would have already finalised their computations and will be in the process of depositing the balance tax due if any, and filing the returns. The deadline for filing returns for individuals is July 31, 2017.
Here are some points that you should consider while finalising your returns. If required, you can modify your income tax computations now before filing the returns.
The income Tax Act provides a separate head ‘Income from House Property’ for computation of income from a house. The income from all houses owned by an individual needs to be considered under this head. Regardless of whether a property is self-oc cupied, rented out or even lying vacant, it has to be considered.
In case of a self-occupied property, the interest paid on a housing loan availed to buy it is deductible subject to a maximum of Rs 2 lakhs per annum.In case of a let-out property, there is no such limit.
Even if a property is lying vacant, and no actual income is received from it, ‘deemed income’ from the property is chargeable to tax. However, you have the choice of designating any one of your vacant properties as a self-occupied property and claiming it as exempt from tax. For the other properties, their deemed annual value is chargeable to tax.
Source : The Times of Group (Bangalore)