House property
This query is : Resolved
03 June 2014
if part of house let out and other portion is self occupied and Municipal taxes can be deducted only to the proportion of HP let-out in municipal tax *%of let out house or not
03 June 2014
IN THIS CASE,SELF OCCUPIED AND LET OUT PORTION SHALL BE TREATED AS SEPRATE HOUSE.
COMMON VALUE LIKE FAIR VALUE, MUNCIPAL VALUE, MUNCIPAL TAX AND INTEREST SHALL BE PROPORTIONATELY DIVIDED.
INCOME OF BOTH UNITS SHALL BE COMPUTED SEPRATELY AND *% OF MUNCIPAL TAXES OF LET OUT PORTION DEDUCTED FROM THE LET OUT INCOME
COMMON VALUE LIKE FAIR VALUE, MUNCIPAL VALUE, MUNCIPAL TAX AND INTEREST SHALL BE PROPORTIONATELY DIVIDED.
INCOME OF BOTH UNITS SHALL BE COMPUTED SEPRATELY AND *% OF MUNCIPAL TAXES OF LET OUT PORTION DEDUCTED FROM THE LET OUT INCOME
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04 June 2014
if house is self occupied for 2 month and let out for left period what should i do on that case.what should we the treatment of municipal tax and MRV/ FRV /SR
04 June 2014
IN SUCH CASE, ASSEESSE WILL NOT GET DEDUCTION FOR THE SELF OCCUPIED PERIOD AND INCOME WILL BE COMPUTED AS IF PROPERTY LET OUT THROUGHOUT THE YEAR.REASONABLE EXPECTED RENT SHALL BE TAKEN FOR THE WHOLE YEAR BUT THE ACTUAL RENT RECEIVABLE SHALL BE TAKEN FOR ONLY FOR THE LET OUT PERIOD. MRV/FRV/SR/ SHALL BE TAKEN FOR THE WHOLE YAER. MUNCIPAL TAX TO BE DEDUCTED FOR THE WHOLE YEAR.
05 June 2014
if assessee total income is't exceed 200000 but it's interest on FD exceed rs 10000 what should be the treatment in that case
28 July 2024
Let's break down your queries:
### **1. Deducting Municipal Taxes for Mixed Use Property (Part Let-Out and Part Self-Occupied)**
When a property is partially let out and partially self-occupied, the treatment for municipal taxes and other deductions under Section 24(b) and Section 10(13A) is as follows:
- **Municipal Taxes:**
- Municipal taxes are deductible under Section 24(b) when computing income from house property.
- For a property that is part let-out and part self-occupied, municipal taxes can be deducted in proportion to the part of the property that is let out.
- For example, if 50% of the property is let out, you can deduct 50% of the municipal taxes paid from the rental income of the let-out portion.
**Example Calculation:**
- **Total Municipal Taxes Paid:** ₹20k
- **Percentage of Let-Out Property:** 50%
- **Municipal Taxes Deductible:** ₹20k * 50% = ₹10k
This deductible amount will be accounted for when calculating the rental income from the let-out portion.
- **Self-Occupied Portion:**
- Municipal taxes paid on the self-occupied portion cannot be deducted from the rental income but can be considered for the calculation of notional rental income if the property is deemed to be let out.
### **2. Treatment of Interest on FD for an Assessee with Total Income Below ₹2 Lakh**
- **Interest on Fixed Deposits (FD):**
- Interest income from FDs is taxable under the head “Income from Other Sources.”
- For an individual whose total income does not exceed ₹2 lakh, the interest income may still be taxable.
- There is no separate tax exemption for interest on FDs if the total income exceeds the basic exemption limit (₹2.5 lakh for FY 2023-24).
- However, if the total income is below ₹2.5 lakh and the FD interest is below ₹10,000, it falls under the exemption of tax-free interest. If it exceeds ₹10,000, TDS would be deducted, but you will need to include this income in your tax return.
**Example Calculation:**
- **Interest on FD:** ₹12k
- **Total Income (excluding FD Interest):** ₹1.80L
- **Total Income including FD Interest:** ₹1.92L
Since the total income including FD interest is below ₹2.5 lakh, you might not have to pay any tax. However, you must declare the FD interest in your return.
### **3. Treatment for Tax Return Filing:**
- **Income Declaration:**
- Ensure you declare all income including FD interest on your Income Tax Return (ITR). Even if your total income is below ₹2.5 lakh, you should still report FD interest.
- **Tax Liability:**
- If your total income including FD interest exceeds ₹2.5 lakh, you will need to pay tax on the excess amount. If the total income is below ₹2.5 lakh, you are not liable to pay tax, but the income should still be reported.
**In summary:**
- For mixed-use properties, municipal taxes can be deducted proportionately for the let-out portion.
- Interest on FDs must be reported in your tax return. If the total income including FD interest is below ₹2.5 lakh, you may not owe any tax, but you must still declare it.
If you have further specific queries or complex scenarios, consulting a tax professional for personalized advice is always a good practice.
### **1. Deducting Municipal Taxes for Mixed Use Property (Part Let-Out and Part Self-Occupied)**
When a property is partially let out and partially self-occupied, the treatment for municipal taxes and other deductions under Section 24(b) and Section 10(13A) is as follows:
- **Municipal Taxes:**
- Municipal taxes are deductible under Section 24(b) when computing income from house property.
- For a property that is part let-out and part self-occupied, municipal taxes can be deducted in proportion to the part of the property that is let out.
- For example, if 50% of the property is let out, you can deduct 50% of the municipal taxes paid from the rental income of the let-out portion.
**Example Calculation:**
- **Total Municipal Taxes Paid:** ₹20k
- **Percentage of Let-Out Property:** 50%
- **Municipal Taxes Deductible:** ₹20k * 50% = ₹10k
This deductible amount will be accounted for when calculating the rental income from the let-out portion.
- **Self-Occupied Portion:**
- Municipal taxes paid on the self-occupied portion cannot be deducted from the rental income but can be considered for the calculation of notional rental income if the property is deemed to be let out.
### **2. Treatment of Interest on FD for an Assessee with Total Income Below ₹2 Lakh**
- **Interest on Fixed Deposits (FD):**
- Interest income from FDs is taxable under the head “Income from Other Sources.”
- For an individual whose total income does not exceed ₹2 lakh, the interest income may still be taxable.
- There is no separate tax exemption for interest on FDs if the total income exceeds the basic exemption limit (₹2.5 lakh for FY 2023-24).
- However, if the total income is below ₹2.5 lakh and the FD interest is below ₹10,000, it falls under the exemption of tax-free interest. If it exceeds ₹10,000, TDS would be deducted, but you will need to include this income in your tax return.
**Example Calculation:**
- **Interest on FD:** ₹12k
- **Total Income (excluding FD Interest):** ₹1.80L
- **Total Income including FD Interest:** ₹1.92L
Since the total income including FD interest is below ₹2.5 lakh, you might not have to pay any tax. However, you must declare the FD interest in your return.
### **3. Treatment for Tax Return Filing:**
- **Income Declaration:**
- Ensure you declare all income including FD interest on your Income Tax Return (ITR). Even if your total income is below ₹2.5 lakh, you should still report FD interest.
- **Tax Liability:**
- If your total income including FD interest exceeds ₹2.5 lakh, you will need to pay tax on the excess amount. If the total income is below ₹2.5 lakh, you are not liable to pay tax, but the income should still be reported.
**In summary:**
- For mixed-use properties, municipal taxes can be deducted proportionately for the let-out portion.
- Interest on FDs must be reported in your tax return. If the total income including FD interest is below ₹2.5 lakh, you may not owe any tax, but you must still declare it.
If you have further specific queries or complex scenarios, consulting a tax professional for personalized advice is always a good practice.
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