Tax exemption on income from rent of let out property

890 views 4 replies

anujsar

salaried employee

23 Points Posted on 19 April 2024

Hello,

I read on my websites that there is an exemption on income from rent of let out property if the gross annual value (total rent received in a year) is less than Rs. 250000. This means no tax on rental income for annual rent upto Rs. 250000. Is this correct?

And if yes, in which schedule of ITR2, this exemption can be claimed since in ITR2 system is considering the income from rent as taxable even if the total rent in the year (before std deduction and municipal taxes) is less than Rs. 250000.

And also is this exemption applicable in both new and old tax regimes?

Kindly help me out on this.

Replies (4)

CA Roomi Gupta

FCA

157 Points Posted on 19 April 2024

As per Section 24A of the Income Tax Act, a taxpayer is entitled to a 30 percent standard deduction from the rental income to cover expenses like renovation/repairs.

No tax will be payable on total income upto Rs. 5 lakh in old tax regimes and total income upto Rs. 7 lakh in new tax regimes

Ashwin Kumar

CA ipcc

449 Points Posted on 21 April 2024

To put it simply under new regime even if you earn 10 lakhs rental income still you won't have to pay any tax

anujsar

salaried employee

23 Points Posted on 22 April 2024

Thanks for the response.

I was referring to below article. Can you please confirm whether the information related to tax exemption on rental income is correct.

https://business.outlookindia.com/personal-finance/tax/tax-implications-you-should-know-while-renting-out-your-property#:~:text=Income%20Tax%20Exemption%20for%20Rental,self%2Doccupied%20and%20leased%20properties.

Income Tax Exemption for Rental Income up to Rs 2.5 Lakh

Starting from the fiscal year 2021-22, individual taxpayers enjoy an exemption from paying taxes on rental income up to Rs 2.5 lakh. This exemption is applicable for both self-occupied and leased properties.

Aryan Abhishek

SEO

22 Points Posted on 23 April 2024

Ledger Labs offers comprehensive Tax Preparation and Planning Services designed to meet the needs of both individuals and businesses. Our services are tailored to ensure that clients not only comply with current tax laws but also benefit from proactive strategies to minimize tax liabilities and enhance financial opportunities.

Ledger Labs:-https://www.theledgerlabs.com/tax-preparation-and-filings/