Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: VAT Audit :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: VAT RATES :: empanelment :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company :: cpt
 
 
« General »
 Advance tax payout by top cos grows just 2% in Sept quarter
 Why abolishing personal income tax may not be a good idea
 Questions about the GST cess
 How to prepare for the looming tax-extension deadline
 Income tax: Gratuity for employees raised to Rs 20 lakh; here is how you will benefit
 Haryana to set up scrutiny panel on GST benefits
 Waive certain taxes for companies in insolvency proceeding
 I-T department to appoint 7600 more tax return preparer scheme to cover entire country
 All eyes are on GST as Centre plans higher social pension
 Exporters demand total exemption from GST
 Here's what you must know to stay clear of taxman

Got a second home? Know your tax gains too
December, 03rd 2009

Shelter is one of the basic human needs and buying a house is generally every households dream. These days, keeping in view the rise in income levels, households also look at the option of investing in more than one house property . People buy a second home for many reasons , which, inter-alia , include as an investment for capital appreciation; to use it as a holiday home; to get a regular stream of income by way of rentals; or to diversify their investment portfolio.

Whatever be the reason, an important aspect to be considered at the planning stage is the tax implication of owning and maintaining the second home.

SECOND HOUSE SELF-OCCUPIED

If an individual owns more than one house property for his use, then under the provisions of the Income Tax Act, 1961 (the Act ), any one property as per his choice is treated as self-occupied and its annual value is computed to be nil.

The other house property is deemed to be letout and a notional rent as per the provisions of the Act is computed as the taxable income under the head Income from House Property . In other words, the second house is treated as being rented-out and its estimated rental income is treated as taxable income.

SECOND HOUSE LET-OUT

If the second house is let-out to a tenant, the actual rent received, subject to certain conditions, is treated as the taxable income under the head Income from House Property .

DEDUCTION FOR MUNICIPAL TAXES

The taxes paid to the local authority, generally the municipal taxes, are allowed as deduction in the financial year, in which such taxes are actually paid. This is irrespective of whether these taxes pertain to the current financial year or the earlier year.

Therefore, an individual should keep a track of the municipal taxes paid and claim this deduction accordingly.

DEDUCTION FOR REPAIR & MAINTENANCE

Further, a sum equal to 30% of the annual value of the house property is allowed as deduction towards repair and maintenance charges.

It is pertinent to note that this deduction of 30% is a fixed percentage, irrespective of the actual amount incurred by the individual i.e., irrespective whether an individual incurs more or less amount, he can only claim a deduction for 30% of the annual value of the house property.

INTEREST DEDUCTION

Interestingly, in both the above scenarios, i.e., whether the second house property is deemed to be let-out or actually let-out , the actual interest paid on the housing loan is allowed as deduction . This is contrary to the case of a self-occupied property, wherein the maximum interest on housing loan is restricted to Rs 150,000 p.a., subject to certain conditions.

Hence, investment in house property even if it is a second house, does have its own tax benefits. If one is lucky enough to own more than one house property then s/he can avail of tax benefits mentioned above, in respect to the second house.

 

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Team

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions