Housing property helps save on taxes, multiply gains
municipal laws. If a taxpayer is a landlord and is paying the municipal taxes for these properties, then both of these will be subtracted to obtain the Net Annual Value. If the taxpayer has four properties, they should preferably consider the property with the highest GAV as self occupied and the rest should be regarded as DLOPs.
Self-occupied property
A property is considered to be self occupied when an individual uses it for their own living purpose. If they own more than one property, only one can be considered as a self-occupied property and the rest are considered to be LOPs or DLOPs. Certain important points to be noted here are:
* A property is not taxable under house property taxes if it is used for commercial purposes.
* The NAV on the property will be zero if the property is occupied throughout the financial year.
* However, if it is occupied for some part of the year and procured income — rent —then the LOP will be calculated for the time period it was let out. The annual value will be calculated in the same way as the LOP.
Deductions
A taxpayer can claim the following deductions from the Net Annual Value (NAV) under section 24(b):
Standard Deduction under Section 24(a): Possession of a residential property leads to high maintenance cost; however, regardless of the fact whether the taxpayer has incurred any expense or not, they can claim a flat exemption of 30% on the NAV of the property. This deduction is
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