If you also have rental income. So be sure to know how much tax you will have to pay on this. If you do not know, then you can also suffer a huge loss. Know the full details in the news.
Tax on rental income: If you have given your house on rent, then the income from it comes under the purview of tax (Rental Income).
Even if you have invested in real estate and are earning income from it, tax liability arises. In such a situation, it is necessary for the landlord to have detailed information about the income from rent and the tax on it (Tax on rented income). Rental income gets added to your total income and you have to pay tax according to the tax bracket you fall in.
The only source of income of the individual, even then it is necessary to fill the return.
If the only source of income of an individual is rental income and it is up to Rs 2.5 lakh in a financial year, then it is not necessary to file the return. Many types of deductions are also available on rental income. According to the information available on the website of the Income Tax Department, the gross annual value is the income earned from rent throughout the year. Municipal tax can be deducted from this income.
Figure it out in five steps
The calculation of tax on income from house property can be understood in five steps. For example, if the rent for one month is Rs 30,000, then the rent for one year becomes Rs 3.6 lakh. This is called Gross Annual Value.
Get the benefit of 30% deduction
After deducting the property tax from the gross annual value, the net annual value is obtained. Suppose the tax of 60 thousand has been paid. In this case, the net annual value comes down to Rs.3 lakh. Property tax is also called municipal tax. Now the deduction of 30 per cent can be availed under section 24A. Its calculation is done on the basis of net annual value.
Deduction Benefit
In this case, the amount of deduction under section 24A will be Rs 90,000. After the deduction, the net annual value comes down to Rs 2.1 lakh. If the rented property is purchased with the help of a home loan, the interest repayment is eligible for deduction under section 24B.
Deduction will be available up to 2 lakhs
The benefit of deduction is available on the interest part of the EMI paid in the entire financial year. Its upper limit is Rs 2 lakh. In the above case, after the deduction of Rs 2 lakh, the income of that individual from house property reduces to Rs 10,000.
This will be included in his total income and tax will have to be deposited according to the tax bracket in which he falls.
