ITR Form in case of 2 Houses - 1 on Rent & 1 Self Occupied

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  1. ZED

    ZED Well-Known Member

    You may revise the return u/s 139(5).
     
  2. V K Khanna

    V K Khanna Active Member

    Mr ZED

    I fully endorse what you said in your last post. Now let us examine it from the practical angle. You have advised Mr Agrawal to revise the return u/s 139(5) and obviously to submit the return, in ITR 2A.

    Sch HP of ITR2A refers to details of income from house property ie house property 1, house property 2 and so on. The details of first property are filled up as 'deemed let out' since it is lying vacant. Now, after completing details about property 1, if the system doesnot insist upon details of property 2,it means that ITR2A is the right return in case of one self-occupied property and other lying vacant

    However, in case the system insists upon details about property no 2 which is 'self occupied' in this case. The system would not accept the details as it is meant for 'let out' or 'deemed let out' property.

    Do you have an experience of filing ITR 2A in such cases? If so pl share with us.
     
  3. ZED

    ZED Well-Known Member

    Sorry Sir maybe I didn't quite get you.
    I entered the data as you said (1st let out) and 2nd as self occupied , I had no issues.

    There is option to select any of the three category.

    Sir, You have the option to give details of any number of properties. Infact systems insistence is merely for our aid.
    U/S 80D , for individuals , admissible amount is 15K whereas for senior citizen its 20K and if we get it for parents then it can go upto 40K. Earlier returns did not showed the details as the one we are having now. If someone spent 20K for himself and he was of age below 60 then by entering 20K , he could claim the deduction.
    Somethings we have to do on our own.

    Let me know If I misunderstood anything.
     
  4. V K Khanna

    V K Khanna Active Member

    @ZED

    Thanks for your last two very informative posts which made me to understand the issues very clearly. Thanks once again.

    I too tried to fill in the data in ITR 2A - relating to one property being deemed let out and other being self occupied and what you said is undoubtedly correct.

    Now the question arises, in which cases ITR1 which too has Col. relating to 'Income from house property' be used.
    Shall we say that it is meant for the assessee having one house property only:-
    a) which has been partly let out and partly self occupied, or
    b) which has been fully let out and the assessee is himself living in a rented property or sharing accommodation with his/her spouse or relative.

    I would like to have your views on this issue since you were anticipating my reaction to your last reply.

    Thanks!
     
    Last edited: Sep 13, 2015
    Chandrashekar M likes this.
  5. ZED

    ZED Well-Known Member

    Thanks a lot sir for replying and for what you said on other thread. I just don't have words to say, I shall use a gesture *bows*

    Ah! I think now I got what's creating confusion.

    In nutshell I wish to say , if property is entirely self occupied or entirely let out. ITR-1 is an appropriate form (s.b.t to other conditions)

    Answer lies within charging section, but I will be willing support it with judgements aswell [if asked] (I will need to search)
    I hope you won't mind if even this post goes long aswell.

    If you read the example [in image] mentioned at the end of the post before reading the text below it will become more easy and less time consuming.
    Under the head "income from house property" we have concept of *units* .
    A unit can be a room of the house or it can be entire house which has been combined with the other house so as to make them a single house property.

    If unit can not be combined then definitely it shall be treated as another house property.



    Let's analyse the section
    22. The annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him the profits of which are chargeable to income-tax, shall be chargeable to income-tax under the head "Income from house property".


    1.The word property has been used in singular whereas the word "building" and "land" have been used in plural. A property can consist of several units being lands and buildings and yet remain a single house property.

    For this you may refer the following page [read only text in red colour]
    http://www.forum.charteredclub.com/...-house-for-capital-gains-tax.7704/#post-19675

    2.
    "Shall we say that it is meant for the assessee having one house property only:-
    a) which has been partly let out and partly self occupied"

    Let's read another provision [S.23(1)]
    [You may read only text in colour and bold]
    23. (1) For the purposes of section 22, the annual value of any property shall be deemed to be

    (a) the sum for which the property might reasonably be expected to let from year to year; or
    (b) where the property or any part of the property is let and the actual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), the amount so received or receivable; or

    (c) where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owing to such vacancy the actual rent received or receivable by the owner in respect thereof is less than the sum referred to in clause (a), the amount so received or receivable :


    Since in such a case there are independent and demarcated units of house property, each unit shall be treated independently.
    You might say that ITR-1 can be used in such case because there is only one house property. Then I will be asking Sir, what will you select under "type of house property"
    Whether "Self occupied" or "Let out" ? since only one option is selectable.

    As soon as part of the house is let out, that part can not be said as "self occupied"

    Although I do not see any problem in computation but this part is giving us issues.
    Hence I would prefer ITR form other than ITR-1, I do not have any objection if other view is taken.
    Further I wish to inform that even if only "self occupied" option is selected, the return per se shall not be invalid.

    [You may read only underlined text]

    "S.292B. No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act."


    Coming to second part

    "b) which has been fully let out and the assessee is himself living in a rented property or sharing accommodation with his/her spouse or relative."

    Yes, ITR-1 is an appropriate form.


    While keeping in mind S.23(1)(b) lets further read the next provision
    Here also they have envisaged the concept of part of the house [Unit]

    S.23(2) Where the property consists of a house or part of a house which—

    (a) is in the occupation of the owner for the purposes of his own residence; or

    (b) cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him,

    the annual value of such house or part of the house shall be taken to be nil.




    Lets read the extracts from tutorials at income tax site
    Source-http://www.incometaxindia.gov.in/tutorials/12. income-from-house-property.pdf
    Capture.PNG





    Let me know if I was able to answer to what was required by you. Further if you have any opinion,suggestion then kindly do share.
    I am willing to share judgement, if asked by you, actually sir I will have to search for that, I have forgotten the name.
     
    Last edited: Sep 13, 2015
  6. V K Khanna

    V K Khanna Active Member

    Thanks for the reply. It is very informative and I enjoyed reading the same.
     
    ZED likes this.
  7. Partha S Chowdhury

    Partha S Chowdhury New Member

    Sir,
    After going through the views, it appears to me that ITR-2 is the appropriate form for filing return by the assessee having only one property where part of the property is self occupied & part is let out.
    A confirmation is requested.
    With regards,
    Partha S Chowdhury
     
  8. ZED

    ZED Well-Known Member

    Form other than ITR-1 form would be more appropriate. As explained earlier, ITR-1 may be used, but it's not an appropriate form.
     
  9. Savera Singh

    Savera Singh New Member

    Hi,

    Thanks to all for your inputs.

    I have the same situation ( 1 self occupied house and 1 rented house), and I am not a finance person to comprehend all the arguments provided above.

    Can we please summarize , in this situation - "salaried professional with income less than 50 lakh having 1 self occupied house and 1 rented house" , which ITR form to be used for AY 2017-18?

    ITR-1 or ITR-2 ?

    Kindly respond.

    Best Regards,
    Savera
     
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