question is not understoodable. Please elaborate it.
House property income
Is it mandatory to specify the property which is self occupied in return if deduction u/s 54 is being claimed for the sale of that property.if yes please provide reference of it act or it rule.
Asked 5 years ago in Income Tax
I had sold a residential property 'A' in ay 2017-18. Out of the sale consideration purchased another residential property say property'B'. At the time of sale I had another property (Flats) 'C'.I claimed deduction under section 54 as against the capital gain raised. Section 54 says - "... being a residential house, the income of which is chargeable under the head "Income from house property" ," It means for the deduction to be allowable property 'A' should be such income from which should be chargeable under the head house property in AY 207-18. However I had not shown income from property'A' during that year. Hence the deduction is not allowable for me. Now I can argue that I had two properties at the time of sale but the property'A' was self occupied hence no house property income was to be shown under the head house property. That's why I didn't mention it in the return of AY 2017-18. I had mentioned property B in ITR as address of mine and left blank all the column of Schedule-HP. My question is "is it mandatory to declare any property as self occupied in the return,or Am I free to not mention it in ITR as the same is self occupied hence income of which is NIl?? If yes please give the reference of the ACT."
Asked 5 years ago
You are not required compulsorily to give reference of self occupied property in your return of income but if you are owning two properties at same time you should have declared one of them as self occupied and one of them as deemed let out.
As far as section 54 is concerned it just says that it must be a house property whose income is covered under income from house property and so it's just an expression and one should not take it literally that it's name should be there in income from house property it's just mentioned there so that the asset which is sold is a person's capital asset and a person who normally shows Rent from house as business income doesn't later on come to claim gain on its sale as capital gain u/s 54.
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It is seen commonly that if both the house properties are self-occupied and one is vacant throughout the year, assessee does not pay tax on deemed rent concept.
Hi,
No, it is not mandatory to specify the property which is self occupied in return if deduction u/s 54 is being claimed for the sale of that property.
As per the provisions of the I-T Act for FY2017-18, if a person owns more than one house property and none of them has been let-out during the year (even for a single day), then he can treat either of the house property as self-occupied, and all other house properties are deemed to be let-out. As a result, the market rent, a similar property would fetch if let-out for the complete year, is deemed as the annual value of such property, and a person has to pay tax on it even if he does not earn any income from such property.
Hi,
Section 54 says that income of which is being chargeable under the head income from house property. It does not necessarily mean that there should be a taxable income and you should show it in return of income. What it means is that nature of income should be such that if it arises from that property, it should be liable to be taxed under the head house property and not any other head.
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