An employee claims his Loss on House property Upto Rs.150000 in his Form 16 and his income is around Rs.30 lakh per Annum and he have given the property for Rent and he earns Rs.14,000/- per month.for this he paid advance tax seperately and not declared in the Form 16.
For his IT return purpose how i have to calculate the Tax on House property?
Which ITR i have to file and how i have to shown this loss on house property of Rs.1500000/- and Income from House Property and tax paid details?
26 July 2012
Are you talking of one and same house property or your assessee has 2 properties. Assuming only one house property, calculate the house property income... rent less municipal taxes less interest on borrowed capital..... File ITR2
27 July 2012
He claimed HRA from Company as well as Interest on housing loan and his property is Let out and he paid seperate Advance Tax for Rental Income.
In this case how we have to shown the details in ITR?
28 July 2024
To accurately file the income tax return (ITR) and calculate the tax implications for an employee who has claimed a loss on house property and has rental income, follow these guidelines:
### **1. Understanding the Situation:**
- **Loss on House Property:** The employee has claimed a loss of ₹1.50L on house property in Form 16. This indicates that the interest on housing loan and other expenses related to the house property exceed the rental income.
- **Rental Income:** The employee earns ₹14K per month in rental income from the property. This amounts to ₹1.68L annually (₹14K x 12 months).
- **Advance Tax:** The advance tax paid separately for rental income must be accounted for.
- **Claimed HRA:** The employee is also claiming House Rent Allowance (HRA) from the employer.
### **2. Filing the Tax Return:**
**ITR Form to Use:** - **ITR-2:** Since the employee has rental income and has claimed a loss on house property, ITR-2 is the appropriate form to use. ITR-2 is used by individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession.
**Steps to Follow:**
**a. Income from House Property:**
1. **Calculate Rental Income:** - Total rental income = ₹1.68L
2. **Deduct Municipal Taxes:** - Municipal taxes paid (if any) should be deducted from the rental income. For example, if municipal taxes paid are ₹10K, the net rental income would be ₹1.68L - ₹10K = ₹1.58L
3. **Calculate Loss on House Property:** - Loss from house property = ₹1.50L (as mentioned, this is already claimed in Form 16) - Note: If the loss is due to interest on a housing loan, ensure it aligns with the interest claimed. The maximum loss that can be claimed under the head "Income from House Property" is ₹2L. If the loss is higher, it should be carried forward to subsequent years.
4. **Report the Income and Loss:** - In ITR-2, go to the section for "Income from House Property" and enter the rental income and the loss from house property. The loss will be set off against other income as per provisions.
**b. House Rent Allowance (HRA):**
- Ensure that the HRA claimed is reflected correctly in the "Income from Salaries" section of ITR-2. You need to calculate the exempt portion of HRA based on the employee’s actual rent paid, HRA received, and the city of residence.
**c. Advance Tax Paid:**
- Report the advance tax paid for rental income under the section "Tax Paid and Verification" in ITR-2. The advance tax paid will be adjusted against the total tax liability calculated.
**d. Details in ITR-2:**
1. **Income from House Property:** - Enter the rental income received. - Deduct municipal taxes (if any). - Claim the loss on house property (₹1.50L), ensuring it’s within the limit of ₹2L
2. **Tax Computation:** - Add the income from house property to other sources of income. - Deduct any allowable deductions and calculate the total tax payable. - Adjust the advance tax paid and any TDS (if applicable).
**e. Attachments and Documentation:**
- While filing online, ensure you have all supporting documents handy, such as: - Proof of rental income. - Proof of municipal taxes paid. - Details of housing loan interest. - Proof of HRA claimed. - Proof of advance tax paid.
### **3. Summary:**
- **ITR Form:** Use ITR-2 for filing. - **Rental Income:** Report ₹1,68,000 (net of municipal taxes). - **Loss on House Property:** Report the loss of ₹1,50,000. - **Advance Tax:** Report separately in the "Tax Paid" section.
**Conclusion:** Ensure that all income, deductions, and losses are accurately reported in ITR-2. Any discrepancies between Form 16 and actual income tax return can lead to issues, so it’s crucial to ensure consistency and accuracy in reporting.
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