FAQ on filing IT return for FY 2019-20

Mr. Vasudev owns 2 flats, one in Basavanagudi and another one at Sanjaynagar. He is staying at Basavangudi and the 2nd flat is empty. The monthly rent of neighboring flat at Sanjaynagar is Rs.25,000 per month. 

Mr. Vasudev wants to know how much notional rent he has to consider while filing IT return for FY 2019-20?

Section 23 of Income Tax Act – How to determine Annual Value of any property.

  • Till Financial Year 2018-19, one house is considered as Self-occupied and 2nd house onwards, whether actually rented out or not, the rental income (actual or notional) was supposed to be declared as Income
  • From Financial Year 2019-20, 2 houses are considered as Self-Occupied and 3rd house onwards the rental income (actual or notional) to be declared as income.

Is this good for the taxpayer?

  • Yes, for those who don’t have any housing loan on the second house.
  • No for those who have house loan where Interest was more than the rent. (Interest set-off against notional rent was available)

Carryout forward interest benefit is available only for rented house. So, the people who have c/f interest will be at loss.

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About B E Kumar Prasad

B E Kumar Prasad
He is a Practicing Chartered Accountant in Bengaluru, India. He has 25+ years of experience in income tax, business setup, and NRI matters. He is also an Insolvency Professional and Registered Valuer (F&SA).Prasad welcomes your comments and questions. Please email him at [email protected]

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