Income from a property, including buildings or land, falls under taxable 'house property' income. Individuals can report this income using various tax return forms like ITR-1, ITR-2, ITR-3, or ITR-4.
Understanding Income from House Property
Income to fall under the 'Income from House Property,' three conditions must be met:
1. The property should be a building, land, or an apartment.
2. The taxpayer should be the owner of the property.
3. The property should not be used for business or professional purposes.
There are different types of house properties and they affect taxation, here's the breakdown: house properties can be self-occupied, let out to tenants, or inherited, and the taxation varies based on these categories.
Let-Out Property: This is when you rent your property to tenants, and you get money from them as rental income.
Self-Occupied Property: If you live in the house yourself, it's considered self-occupied. Even if you can't live there because of work or business in a different place, you can still treat it as self-occupied for tax purposes. For tax calculations, you can treat up to two houses as self-occupied.
Deemed Let-Out Property: If you own more than two houses for personal use, you can choose two as self-occupied. The others are treated as deemed let-out properties.
When you fill out your income tax return, you'll have to pick the right type of house property from the options in the form. Choosing the correct category is crucial for accurately reporting your income from the property and getting the right deductions.
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