Rental Income: Your planning done at the right time decides how much tax you can save on a large part of your income.
Rental Income: If you have houses on rent as a source of your income, then you will have to pay tax on the rental income from those houses as well. The income from house or any other property comes under the purview of taxable income only. Under section 24 of the Income Tax Act, 1961, this income has been declared taxable in the income from house property. If you are aware of this, then you should prepare for it well in advance. With proper planning, you can avoid paying tax on a major portion of your rental income.
How can you save tax on rental income?
Your planning done at the right time decides how much tax you can save on a large part of your income. However, the government also wants people to invest in the purchase of property or land. That’s why the government also gives some relaxation on this matter. You can avail many tax incentives by complying with section 24 while staying within the ambit of the rules.
This is how you will get discount
Home loan discount
2 lakh in tax on home loan as well. Discounts up to Rs. If you have bought a house by taking a home loan and are going to rent it, then you get a rebate of up to 2 lakhs on the interest of the loan under 24B. Under certain rules, you can avail tax benefit of up to 1.5 lakhs.
Benefit from joint property
If you have bought property jointly with someone, then your tax liability can come down. Section 24 and 80EEA can be availed by the owner and co-owner.
Municipal tax deduction
There are many different types of taxes on a house like sewage tax, property tax etc. You can reduce your liability on these taxes as well. The condition is that you pay this tax yourself. If the tenant is depositing this tax, then you will not be able to get tax exemption.
Maintenance charge
Do you charge rent from your tenant including maintenance charges? So, this amount will also be counted in your income. At the time of making the agreement, you have to make a provision that the maintenance charge will be given directly to the society. This will count your income less.
