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This article explains How to Fill Income from house property in Income Tax Return with rules and pictures. The Income Tax Act of India classifies income in five heads of which “Income from House Property” is one of them. It comprises of income earned by a person through the property(s) owned by him/her. Our article Tax : Income From House Property discusses it in detail.To fill in Income from House Property in ITR you need following

Type of House Property you own

Find the type of property you own ex Self Occupied, Rental etc and understand rules corresponding to it. For example, for Self Occupied Property Annual Value is Nil, Standard deduction of 30% not allowed.

  • Self occupied property, i.e. property where the owner or his family reside in the house property.
  • Let out: Property given on rent.
  • Vacant or Deemed Let out : If the house is vacant it is considered as Deemed to be Let out . It is expected to generate income for you and you need to pay tax on what you could have earned.
  • If you have more than 1 property you cannot file ITR1. You can file any other ITR based on your type of Income. Use our article to find Which ITR Form to Fill?
  • You can choose any house as Self-occupied which will minimize your tax liability.

Our article Income From House Property for more than 1 house explains it in detail.

Tax on House Property

  • The Stamp duty/ Registration charges paid while acquiring property are allowed deduction Under section 80C.  The maximum tax deduction allowed under Section 80C is Rs. 1,50,000 only. This tax deduction of Rs. 1,50,000 is the total of the deduction allowed under Section 80C and includes amount invested in PPF Account,Tax Saving Fixed Deposits Equity Oriented Mutual funds etc.

The Principal of Home Loan

Principal amount paid towards Housing loan for purchase or construction of House Property is allowed as a tax deduction under Section 80C of the Income Tax Act only after the construction is complete and the completion certificate has been awarded.

  • The maximum tax deduction allowed under Section 80C is Rs. 1,50,000 only. This tax deduction of Rs. 1,50,000 is the total of the deduction allowed under Section 80C and includes amount invested in PPF Account,Tax Saving Fixed Deposits Equity Oriented Mutual funds etc.
  • Section 80C allows for deduction only on payment basis i.e you should have paid the prinicipal
Section 80C in ITR

Section 80C in ITR

The interest of Home Loan

Two types of deductions for interest on Home Loan are available u/s 24

1) The standard deduction of 30% of the annual value
2) Interest paid on home loan

Tax Benefit on payment of interest on housing loan is allowed as a deduction under section 24 of the Income Tax Act which states that the amount of interest on housing loan whether accrued or paid, shall be deducted from the income from house property. Here, the loan must have been taken for the purpose of purchase or construction.

Section 80EE: Deduction for First Time Home Buyers

  • 80EE deduction on the interest paid on home loan is only available to first time home buyers.
  • The deduction can be availed on home loans sanctioned between 1st April 2016 and 31st March 2017 only
  • The value of property for which the loan has been taken should be less than Rs 50 lakh
  • The home loan amount should not exceed Rs 35 lakh
  • The tax benefit here can be claimed till the time repayment of loan continues
  • The deduction is only applicable on home loan paid for first house property
  • The property in question can be either self-occupied or non-self-occupied
  • The quantum of deduction is Rs 50,000 for interest paid on home loan.
  • This deduction is available over and above the deduction of section 24 and section 80C which are Rs 2,00,000 and Rs 1,50,000 respectively. First claim your deduction under section 24, then claim under 80RR.
  • The government reintroduced section 80EE in the Union Budget 2016-17.
  •  It was first introduced in the Union Budget for Financial Year 2013-14 as a means to help home buyers in the lower income group through tax reliefs. At that time, the amount of tax benefit given by this section was Rs 1 lakh, which was available to be claimed only once by the first time home buyer.
Home Loan Statement showing Principal and Interest

Home Loan Statement showing Principal and Interest

Note,

  • Income from house property is taxable in the hands of owner/deemed owner of the property. Owner is a person who is entitled to receive income from property.  A deemed owner is an owner by implication, although he may not be the owner in whose name property is registered. For example An individual who gifts property to his spouse or minor child will be treated as the deemed owner of that property. Here, though legally the owner of the property is his spouse or minor child, any income from that property will be treated as his income.
  • Where property is owned by two or more persons and their respective shares are definite and ascertainable share of each person in the income from the property shall be included in each of their income.
  • If the loan is joint, divide income, loan in ratio or ownership. Our article Joint Home Loan and Tax discuss it in detail
  • If you have reported income from House Property to your employer, it will be shown in Form 16 but you still need to show it in ITR.

Loan during Pre construction stage

  • The interest paid/payable for the pre-construction period is to be aggregated and claimed as deduction in five equal instalments during five successive financial years starting with the year in which the acquisition or construction is completed.  Pre-construction period starts from the date on which loan is taken to March 31st, immediately prior to the date of completion of construction.
  • No deduction would be allowed under this section for repayment of principal for those years during which the property was under construction.
  • For example If one takes a housing loan of Rs 25,00,000 @4% p.a. for constructing a House on 1st April, 2009 and Construction of house gets completed on 28th February, 2013, then pre-construction period is 01-04-2009 to 31.03.2012 Now if the interest for above pre-construction period amounts to Rs 3,00,000 then deduction will be available in 5 equal instalments of Rs .60,000 each starting from the Financial year 2012-13 to 2016-17.

When one sells/transfers his Property and earns profit, it is taxable under Capital Gain in the year of transfer. Our article On Selling a  HouseCapital Loss on Sale of House discusses Capital gain of house property in detail.

Filling Income from House Property in ITR1 which is Self Occupied

You can fill ITR1 only when you have income from salary and have only 1 house in which you are either living or rent out but is not vacant which technically is called as Deemed to be let out.

  • Show Type of House Property as Self Occupied.
  • Interest payable on borrowed capital. if it is more than 2,00,000 only 2,00,000 will be considered as Interest payable on borrowed capital.
  • If you have not finished the 1.5 lakh limit of 80C you can claim the principal on the home loan.
  • If you have interest component more than 2 lakh and you satisfy the 80EE requirements you can claim remaining interest under 80E deduction.
  • Show Self Occupied property in ITR1 with home loan interest

Show Self Occupied property in ITR1 with home loan interest

Filling Income from House Property in ITR1 which is Let Out

You can fill ITR1 only when you have income from salary and have only 1 house in which you are either living or rent out but is not vacant which technically is called as Deemed to be let out.

  • Show Type of House Property as Let Out.
  • Fill in the Rent received in Gross rent received/receivable/letable value
  • Interest payable on borrowed capital. if it is more than 2,00,000 only 2,00,000 will be considered as Interest payable on borrowed capital.
  • If you have not finished the 1.5 lakh limit of 80C you can claim the principal on the home loan.
  • If you have interest component more than 2 lakh and you satisfy the 80EE requirements you can claim remaining interest under 80E deduction
Show Income from Let out House as Income from House property in ITR1

Show Income from Let out House as Income from House property in ITR1

How to Fill Income from House Property in ITR (other than ITR1)

Instructions to fill Income Income from House Property in ITR2 are shown in image below

Instructions for Filling Income from House Property in ITR2

Instructions for Filling Income from House Property in ITR2

Fill the details in Schedule HP of ITR as shown in image from ITR2 below

Fill in information about property and co-owners

Details of Owners in House property

Details of Owners in House property

  • The information relating to the percentage of share of the assessee in the co-owned property is mandatory.
  • In case the property is co-owned then the assessee needs to furnish the name of the co-owner, PAN(optional) and percentage of share of the other co-owner (s) in the property.
  • If property is not co-owned one can fill Is the property co-owned as NOYour percentage of share in the property as 100.
Income from house property

Income from house property

  • a Annual letable value/ rent received or receivable (higher if let out for whole of the year, lower if let out for part of the year) : The Rent (amount) received from the let out property
  • b The amount of rent which cannot be realized : If there is Bad debts from the rent amount included in above (a)
  • c Tax paid to local authorities : If property tax has been paid during the year irrespective of the period (amount due can not be deducted actual payment must)
  • d Total (1b + 1c) : total calculated automatically
  • e Balance (1a – 1d) : total calculated automatically or Nil if self occupied
  •  f 30% of e :Standard deduction of 30% of the annual value ,calculated automatically
  • g Interest payable on borrowed capital : Interest accrued  on house loan . This amount can not be 1,50000 in case of self occupied house per individual or full amount if let out.
  • Total (1f + 1g) :total calculated automatically
  • i Income from house property which will be used for tax calculation

If there are two or more than two house properties, the details of each of the properties need to be filled. The results of all the properties will be Total income from House Properties and would be filled in last row,3c of this Schedule(HP), as shown in figure below.

total income from house property

total income from house property

If you are claiming Principal in section 80C then total value of all your 80C deductions with the maximum value of 1,50,000 needs to be filled under Chapter VI-A shown in image below.

Income details filled in will be automatically reflected in total calculation in Total Income section of ITR as shown in image below

Income from house property in Total income in ITR

Income from house property in Total income in ITR

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Disclaimer : Please use article the for informational purpose only. We do not hold any responsibility for mis-information or mis-communication.

If you fill the ITR return yourself, please be careful of filling the required information. If you get it filled by some one else(CA,tax website) please verify that information is reflected properly. Hope it helped you in understanding how to show Income from House Property in Income Tax Return. Looking forward to you your comments,feedback,questions.

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