03 September 2013
There are two houses
one is owned by husband
and the second by wife.
Can they show both the houses as self occupied.
if no pls give me the provisions
28 July 2024
Under the Income Tax Act in India, each individual can claim the benefit of self-occupied property for tax purposes. Here’s a detailed explanation regarding the treatment of multiple properties as self-occupied:
### **1. Treatment of Multiple Properties**
#### **Self-Occupied Property (SOP) Benefits:**
1. **Income Tax Provisions:** - **Section 23(2) of the Income Tax Act, 1961:** This section allows that one property can be treated as self-occupied if it is not let out, and no income is deemed from that property. - **Section 23(4):** If the property is not actually let out but is deemed as let out under the provisions, it can still be considered as self-occupied if it is the only property owned by the taxpayer.
2. **Tax Benefit for Self-Occupied Property:** - **Section 24(b):** Allows for a deduction of up to ₹2 lakh on the interest paid on a home loan for a self-occupied property. For properties deemed self-occupied, the deduction is available. - **Section 80C:** Allows deductions for principal repayment up to ₹1.5 lakh on the home loan for a self-occupied property.
#### **Multiple Properties:**
1. **For a Single Taxpayer:** - Only one property can be treated as self-occupied. - Additional properties beyond the first one will be considered as "deemed to be let-out" and will attract tax on the notional rental income under **Section 22**.
2. **For Multiple Taxpayers (Husband and Wife):** - **Section 23(2)** allows each individual to claim one property as self-occupied if they own multiple properties. - Therefore, both husband and wife can claim one property each as self-occupied if they own separate properties.
### **Relevant Case Laws and Provisions:**
1. **Case Law:** - **Case Law:** [G. Venkataswamy Naidu vs. CIT (2003) 264 ITR 23 (SC)] - The Supreme Court clarified that the taxpayer could only claim one property as self-occupied, and others would be deemed to be let-out unless specifically exempted under the law.
2. **Income Tax Act Provisions:** - **Section 23(2) & 23(4)** - Provisions related to self-occupied properties and deemed let-out properties. - **Section 24(b)** - Deduction for interest on home loans. - **Section 80C** - Deduction for principal repayment on home loans.
### **Best Practices:**
1. **Documentation:** - Ensure that you maintain proper documentation to substantiate that the properties are genuinely self-occupied. - This may include utility bills, occupancy certificates, and personal use documentation.
2. **Consult a Tax Professional:** - Given the complexities involved in property taxation and potential legal nuances, consulting a tax professional or financial advisor is advisable to ensure compliance and optimize tax benefits.
### **Conclusion:**
- **Husband and Wife:** Both can claim one property each as self-occupied if they own multiple properties. Additional properties will be taxed as deemed to be let-out properties with notional rental income.
By adhering to these guidelines and ensuring proper documentation, both husband and wife can maximize their tax benefits and comply with the provisions of the Income Tax Act.
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