Do i need to pay tax on 2nd property?
This query is : Resolved
19 October 2011
I have a house in Mumbai in my name. I have got an 2nd property in Kerala by virtue of Inheritance in June 2011. I have 2 sisters and they have been given payment for there share ( which is mutually agreed )and hence the property was transferred to my name.
I need to know the following:
1. Do I needto pay any tax?
2. If Yes, how is the calculation done and under what heading
3. If No, how should I record this transaction for the purpose of Income tax filing for FY 2011-12;AY 2012-13?
I need to know the following:
1. Do I needto pay any tax?
2. If Yes, how is the calculation done and under what heading
3. If No, how should I record this transaction for the purpose of Income tax filing for FY 2011-12;AY 2012-13?
19 October 2011
PROPERTY TRANSFER IN INHERITENCE IS EXEMPT TRANSFER U/S 47 WITHOUT ADEQUATE CONSIDRATION....
YOU ARE NOT REQUIRED TO PAY TAX ON THE PROPERTY WHICH RECIVED BY WITHOUT ADEQUATE CONSIDARTION...AND IN INHERITANCE & FROM RELATIVE
YOU ARE NOT REQUIRED TO PAY TAX ON THE PROPERTY WHICH RECIVED BY WITHOUT ADEQUATE CONSIDARTION...AND IN INHERITANCE & FROM RELATIVE
19 October 2011
Vishal, Thanks for your prompt reply. Howver can you please explain in simple language. I am still not clear
19 October 2011
You are not required to pay any tax on the property which you have acquired by will/inheritance. But, now the position is that you are the owner of two houses. As per House property sections, one has to be considered as deemed let out as per the benefit ot the assessee.
19 October 2011
Dear Yash, As per House property sections, one has to be considered as deemed let out as per the benefit ot the assessee. - Can you please elaborate
20 October 2011
Whenever the assessee owns two houses, he has to follow the below process:
One house shall be treated as self occupied.
The other house shall be treated as deemed to be let out. This means that it will be presumed that the assessee has let out the other house property. The rental income that he would have earned had he actually let out the house shall be treated as his income.
The assessee has the option to choose any one of the houses as self occupied and the other as deemed to be let out.
So, he will choose the house whose fair rental is less as deemed to be let out.
For instance, your Mumbai house can fetch a rental of Rs. 50,000/- p.m. and the one in Kerala can fetch Rs. 20,000/- p.m.
You should take the house in Kerala as deemed to be let out.
Computation of Income from House Property:
You will be allowed the following deductions:
1. municipal taxes paid.
2. 30% of the rental.
3. Interest on loan used to finance the house.
One house shall be treated as self occupied.
The other house shall be treated as deemed to be let out. This means that it will be presumed that the assessee has let out the other house property. The rental income that he would have earned had he actually let out the house shall be treated as his income.
The assessee has the option to choose any one of the houses as self occupied and the other as deemed to be let out.
So, he will choose the house whose fair rental is less as deemed to be let out.
For instance, your Mumbai house can fetch a rental of Rs. 50,000/- p.m. and the one in Kerala can fetch Rs. 20,000/- p.m.
You should take the house in Kerala as deemed to be let out.
Computation of Income from House Property:
You will be allowed the following deductions:
1. municipal taxes paid.
2. 30% of the rental.
3. Interest on loan used to finance the house.
19 December 2012
Thanks for your response. The property in KERALA is under lock & key and there is no rental. What should be the basis of calculation in such case
25 December 2012
The fair rental value shall be taken for the purpose of computing income.
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