Only income from house property for NRI

Only income from house property for NRI

I was Indian Citizen having my PAN Card and was filing my ITR in India every year till 2005 . I migrated to USA for job in 2005 and since then i have not filed my income tax return in India because there was no taxable income for me in india since then . At present , i am US Citizen (with OCI Status) living and working in USA and visit India for 2 - 3 weeks every year . Now , i am also planning to start filing Income Tax Return in India from Assessment Year 2018 - 19 because now i have 2 rented house properties in India and this is the only source of my income in India in addition to some interest on bank balance in NRO account in India . Please clarify :

(1) If i take any bank loan on these rented homes like home loan or loan against property or home renovation loan , etc. , will the interest of such loan be allowed as deduction for any amount under my income from house property head in my ITR ?

(2) My husband has one flat in his name in india which we always used for self-living before migrating to USA and now we keep it for our stay during India visit . Just few months back in December of 2017 , my husband bought a flat (just adjoining to this old existing flat) in his name with the funds kept in my NRO/NRE Bank account in India for less than 18 lacs because i told him to buy this adjoining flat in his name when i was in USA . Is there any effect on my ITR for AY 2018-19 due to buying of this adjoining flat ?

(3) Can my husband treat previous flat as self-occupied in his ITR and can i treat this adjoining newly bought flat as self-occupied in my ITR in India ?

(4) Can i use other other address in preparing my ITR-2 or should i use the same address of my husband's old flat as is given before 15 yrs  in my PAN Card application or first should i get my other address updated in PAN Card before filing ITR-2 ? 

(5) Being NRI , should i use my india address or USA address in my ITR-2 ?

Asked 7 years ago in Income Tax

1) Benefit under income tax in respect to home loan is available for interest and principal only if the amount is utilised either for the purchase or construction or renovation of house property.

2)If there are more than one self occupied house property in single name then as per the assessee choice one property will be deemed as let out. Your husband needs to disclose one self occupied property in his ITR as per his choice and pay tax on deemed rent as per the locality which is either muncipal value or standard rent.

3) If the new property is in your name then no need to disclose in ITR as you both are having single separate property. If it is in the name of your husband then you need to disclose.

4) It depends on you which address you want to retain so that you don't miss any correspondence from the department. Nowadays department is doing maximum correspondence through email still retain that address which is common in all your Indian I'd proofs or your stay in India.

5) Use Indian address in ITR-2.

Vivek Kumar Arora

CA, Delhi

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Hi,

Please find below the response to your queries:

1. Yes you will get the benefit if the same has been used for renovation of the house assuming that you already have the 2 properties in your name.

2. Since there are 2 flats in your husbands name, one of them will be considered as deemed let out.

3. No

4. Yes you can choose the address as per your convenience.

5. Indian address.

Hope that clarifies.

Regards,

Nikhil.

Nikhil Khanna

CA, Mumbai

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Follow -up :
(1) So if I borrow home equity loan or loan against property on my rental home in India and use such amount for my personal non-home expenses or use for home decoration , then I am not allowed interest and principal deduction from annual rent , .............. am I correct ?

(2) I was told that as per income tax , it does not matter whose name the home is reistered in or whose name the home is in , but the owner is whose funds were used to buy home whether the home is in his name or not . Thus , the adjoining flat was bought in my husband name but by my funds in my NRE/NRO account in India . so , what is the effect on my ITR or in which way should I disclose it in my ITR ?

(3) When I am the real owner of this new adjoining flat due to use of my funds (however registered in my husband name as I was in USA that time) , can I not treat it as my self-occupied home in India and pay tax on rest two rental homes which are actually in my name as primary and second is husband name only without his money share ?

(4) So in my ITR-2 , I can give any indian address and no need to update that address in my old PAN Card which I was using 15 yrs back when was working in India , ......... is this correct ?

(5) Can I have your contact (Vivek Kumar Arora) if I need to meet you personally being local in west delhi at arun.naggar@gmail.com ?

Asked 7 years ago

You can reach me at 7060029944 or .com

1) Not allowed. Purpose of law is that it should be utilized for the purpose of residential house property. Personal non-home expenses and for interior home decoration not allowed if it is too luxurious. Only routine or normal modification or renovation is allowed.Nowadays department is asking PAN of the lender bank.

2) Under the deemed ownership concept, you will be treated as deemed owner as the property is financed from your sources. All the income from such property will be clubbed in your hands.

3) Now there are three properties and all the properties are in your name primarily. You need to pay tax on the rental income of two properties and treat one as self occupied (i.e. adjoining one).

4) If you want to give different address then you need to amend it by submitting revision application alongwith the address proof.

Vivek Kumar Arora

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1. It will not be allowed

2. Yes your understanding is correct. The property will be deemed to be owned by you.

3. Yes, you can.

4. Yes. That should be okay. You can change the address of PAN as well to reflect the correct address now.

Regards,

Nikhil.

Nikhil Khanna

CA, Mumbai

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We can arrange meeting as per your convenience. I reside at Subhash Nagar New Delhi.

Vivek Kumar Arora

CA, Delhi

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Talk to Vivek Kumar Arora NOW!

Thanks for all the answers . Please clarify me if my below understanding is correct :

(1) As new adjoining flat was bought through my nre/nro bank account (even flat is not registered in my name , but in my husband name) in December of 2017 , it will be treated as my self-occupied property in my ITR-2 for AY 2018-19 and the rest two flats (which are actually let out and I am the primary owner in  both with 100% share and my husband is co-owner with no share) will be shown as let-out in my ITR-2 for AY 2018-19 , ......... am I correct ? Do I need to provide any supporting docs here ?

(2) There is no effect of this buying of adjoining flat in my husband name on my husband's ITR for AY 2018-19 because it is showing as self-occupied in my ITR and my husband can show his old previous flat as self-occupied in his ITR , ......... is this correct ?

(3) As I am not filing my ITR in india since 2005 and thus not using my PAN since then for ITR , is it ok to start filing my ITR now with my old PAN after 13 yrs ? Is there anything like PAN becomes inactive or I need to activate it before filing in all ?

(4) As I understand that I can give any indian address in filing my ITR-2 from AY 2018-19 and it does not need to be the address of flat I am showing as self-occupied (the adjoining flat bought) or it does not need to be the address as given in my PAN application 15 yrs before ?

Asked 7 years ago

Please share below details on my email I'd .com.

PAN

DOB

Vivek Kumar Arora

CA, Delhi

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1) In this case your husband is legal owner of the adjoining property as the agreement is registered in his name and without his consent property can not be transferred to another person but from Income tax point of view, person who provided funds for the purchase of property is deemed as the real owner of the property even though the property is in the name of the other person. All the three properties needs to be shown under your ITR-2 only, one is self-occupied (adjoining) and other two as let out and the rental income will be taxable in your hands.

2) Yes your understanding is correct. There is no problem.

3) There is no problem. Share your PAN and DOB to check the status of your PAN on the portal. If possible share your copy of PAN card.

4) The address which exists in PAN database is considered by the department for all correspondences and treated as default address. If there is any change in address, I would suggest you to intimate the department and receive all the correspondences from the department on the new address. In your case, it becomes more critical as you are NRI.

Please call me on 7060029944

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Vivek Kumar Arora

CA, Delhi

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5011 Answers

1134 Consultations