3 lesser known ways you can save on your house loans!
By Arnav Pandya
There are different deductions that are available to an individual when they are looking at their final calculation for income from house property. While the tax benefits of interest are well known there is also the benefit of a deduction in the form of a standard deduction that can be used in certain cases. There are specific conditions that need to be fulfilled for the purpose of claiming this benefit and hence this has to be seen in this context as to when it can be utilised.
There is a deduction that is available for standard deduction on the house property but there are some details to be checked before this is claimed. There could be different amounts that are incurred for various purposes like repairs or maintenance or other expenses by different people so in order to make the calculations easier and standardised there is a specified way in which this will be undertaken. Instead of looking at the actual figure to determine the exact amount of the benefit this is calculated as a specified percentage of the gross annual value of the property. The percentage has been fixed at 30 per cent and hence this portion would be allowed as a deduction for the individual at the time of calculating the taxable income from the property.
Let out property:
There is a difference in the manner in which this benefit is available at the time of calculation of the taxable income because this will not be available for all house properties. In this sense there is a difference between something like an interest expense deduction and the standard deduction. The benefit will be zero for a self occupied property where the figure will be such as the gross annual value of such a property is nil. However if there is taxable income in the form of rent earned or deemed rent that is present in the tax workings then the benefit can be claimed.
If one looks at the interest deduction then this is available when there is income earned or deemed to be earned on the property but at the same time it can still be claimed for a self occupied property. What happens is that in case the property is self occupied the income from this or the gross annual value as it is known in tax terminology would be considered as nil. From this figure the applicable interest figure would be reduced. This would give rise to a situation where the income from the house property is actually negative. If the property is self occupied then there would not be any standard deduction expense allowed so this will not go on to increase the negative figure that is witnessed on this front by the individual.
Actual not important:
The actual situation in terms of the repairs and maintenance or any other expense that is undertaken on a house property could be completely different. This could go in either direction which means that there could be that there is a very less amount that are actually spent on this head by the individual or the situation could be reverse where the amount spent is higher than what 30 per cent of the gross annual value works out to be. In either of the conditions there will not be any implication when it comes to the actual amount that is claimed in the tax return. This will remain unchanged at the 30 per cent mark that has been fixed. This is a small but vital point that has to be understood because doing this correctly will enable the individual to make the most out of the situation and complete the requirements.
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