Tax Benefits For Property owners 2019

The 2019 budget has offered some unexpected benefits for property owners. Here are the three main announcements that are likely to bring tax relief to home owners

1) Exemption of notional rent on the second self-owned property

Taxpayers who own more than one house have to pay tax on notional rent, which the property might fetch. This used to put many taxpayers under undue monetary pressure as these taxpayers may have a second house in a native place or one that is used by their parents for which no rent is received. Until now, they had to pay notional rent on the second property, as one can claim only one owned house as self-occupied. Now, taxpayers will be able to claim two owned houses as self-occupied, without having to pay any tax on such notional rent, provided the same is/are not let-out.

2) Exemption on long term capital gains when the same is invested in two houses

Presently, you can claim the tax benefits with respect to long-term capital gains on the sale of residential house, if the indexed long-term capital gains are invested for buying or constructing another one residential house, within the period specified. The interim budget 2019 proposes to expand this benefit to buying or constructing two residential houses, for the purpose of claiming the exemption under Section 54, provided the amount of capital gains does not exceed Rs two crores. Once a tax payer claims the exemption for buying or constructing two house, he cannot claim the exemption for the same year or the subsequent years.

3) Increase in TDS limit for rental income

The third benefit for property owners is by way of increased limit for rent on which the lessee will deduct tax, before paying the rent to the landlord. Against the present limit of Rs 1.80 lakhs, the lessee will now have to deduct TDS, if the annual rent exceeds Rs 2.40 lakhs. The tax is required to be deducted, if the lessee is other than an individual or an HUF. An individual or an HUF lessee will deduct tax while paying you rent, if and only if he is engaged in business or profession and their books of accounts were subjected to tax audits in the previous year.

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