How to save Tax on House Property Income: Tax has to be paid on the rent received from the house. However, this tax is calculated with several exemptions. Along with this, there are some other ways by which this tax can be reduced. Let us know about it in detail.
Income Tax Return (ITR) is being filed for the financial year 2022-23. In such a situation, people are trying to save tax in different ways. People who have given house or any property on rent also have to pay tax. Apart from the house, shop, land and shed etc. are also included in this. Rental income is not included in Form-16 but you have to declare it while filing ITR.
As per the Income Tax Act, the law ‘Income from house property’ is applicable to every person who is earning from rent. Many times even those people who are not getting rent but have many properties have to disclose their property.
What is house property income
If you have given a property on rent to someone, then the income from it will come under house property income. It does not apply only to houses or apartments. The income from the rent of office space, shop, building complex etc. also comes under this.
How is the calculation done
While calculating the rental income, the municipal tax paid by you, the standard deduction available to you and the amount of loan taken on the property, if any, is deducted. The gross annual value is the total income from the rent. In this calculation, 30 per cent is deducted as standard deduction.
How can save
If you want to save tax on your rental income, you can take home loan as the basis and claim exemption. Apart from this, if there are joint owners of the property, then the tax burden will also be divided. Apart from this, you can reduce the liability up to 30 percent by claiming the standard deduction.
Tax can be paid even without taking rent
Under the Income Tax Act, you can keep only 2 properties in your favorite category. That is, if you are not getting rent from these properties, then your tax liability will not arise. But if you have more than 2 properties then they will be considered as let out properties only. You may have to pay tax on this based on the estimated rent.
