New Delhi: Every year in the budget, relief is expected from the Finance Minister on the financial front. At the same time, in this year's budget also people are expected to be relieved especially in tax. At the same time, one of the areas where taxpayers are expecting relief includes the tax on house property. Where the last few budgets gave some relief to the landlords, whose aim was to ensure the government's commitment to 'all houses' by 2022.
According to the Income Tax Act, 1961, in the case of a rented house property, the net annual value of the house property is being deducted from the gross rental value minus the municipal tax. For deduction of taxable income from a house property, the deduction is deducted from the net annual value of 30% of the standard deduction on house repair and maintenance and the interest paid on the housing loan. Since 2002, no increase has been seen in the 30% standard. Due to expensive house repair, utilities and maintenance, the government can increase the standard deduction to 50%.
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Interest on housing loan can be claimed as a deduction. The deduction limit for a self-occupied house property is Rs 2 lakh, however, there is no upper limit on the amount of interest that can be claimed as a deduction for a house property leased. At the same time, it is being said that the pre-construction interest is also included in the limit of two lakh rupees deduction for self occupancy property, which can be claimed in five equal installments. However, the budget limited the amount of housing loss in 2017, which could be claimed up to two lakh rupees in the same assessment year, and arranged for the remaining amount of the loss to be taxed on house property income for the next eight years.
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It is estimated that if the taxpayers do not have positive house property income during the next eight years, then the remaining amount of loss will go waste and the taxpayer will not get the benefit of tax benefit. To reduce the burden of distressed landlords, the central government can increase the deduction on interest of housing loan to at least Rs 5 lakh, and also increase the limit to compensate for the loss.
