I am a retired senior citizen. Earlier I was staying in self owned flat in Delhi. Since last few years I have shifted to Gurgaon and I am staying in self owned house. I have no housing loan liability. My Delhi flat is lying vacant since I shifted to Gurgaon. Till now I have been considering Delhi flat as 'self occupied', and Gurgaon house as ' deemed let out', and have been paying Income Tax on deemed rental income. In the interim budget presented in Feb 2019, relaxation has been given to consider second unoccupied/ vacant flat as 2nd self occupied house i.e. there would be no tax burden (under 'Deemed let out' category). Is this relaxation applicable in my case as detailed above ?
Hi
Section 23 lays down conditions for claiming a house property to be self occupied.
Either you should reside in that house or the house cannot actually be occupied by you by reason of the fact that owing to your employment, business or profession carried on at any other place, you have to reside at that other place in a building not belonging to you.
Both the conditions are not satisfied for your flat which is vacant.
Hence, deemed rent of vacant flat shall be taxable in your case.
Yes of course you will get this benefit and you can show second house also as self occupied in your FY 2019-20 return.
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Thank you.
Section 23 lays down conditions for claiming a house property to be self occupied. Employment, business or profession, as mentioned in section 23 does not apply to me as i am a retired person. Is section 23 applicable in my case ? if yes, would it mean that I can't get the benefit of showing second house as 'self occupied'.
Sir basically that clause in section 23 has been there forever and it was not amended even when relief of 2 house was provided so practically it is irrelevant as of now, so it is controversial but if we take it into consideration most people wont be able to take the benefit of such scheme and this was not the intention of government while bringing this change.
So I think you should claim this benefit.
Dear Sir,
Hope you are doing well !!
Yes, you will get the benefit on second home. You can show the same as self occupied property.
We may discuss the issues further over call.
Follow up question for Ms Payal Chhajed Section 23 lays down conditions for claiming a house property to be self occupied. Employment, business or profession, as mentioned in section 23 does not apply to me as i am a retired person. Is section 23 applicable in my case ? if yes, would it mean that I can't get the benefit of showing second house as 'self occupied'.
Although the act says on account of employment, business or profession, In my view you can avail the benefit of second property as self occupied.
Hello,
You would be able to claim both the houses as self-occupied.
I hope this answer satisfies your requirements.
Regards,
CA Hunny Badlani
Yes, in my opinion, you can't get benefit of self occupied property on second house.
- w.e.f A.Y. 2020-21, section 23(4) has been amended due to value of two self occupied houses will be considered as NIL. You will get the benefit.
Dear Sir,
The value of both houses to be considered as NIL for income tax purpose.
In my view, the benefit of considering two houses as self occupied would be available to you.