Do you have multiple house properties? If yes, here's good news for you. Now, for income tax purposes, you can modify the selection of a house property as \u2018self-occupied\u2019 even during the stage of detailed tax scrutiny\/assessment of your income tax return (ITR). This has been allowed by the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) in a recent case. \u201cThis ruling will enable a taxpayer to replace a house property with other house property claimed as \u2018self-occupied\u2019 in tax return in case notional rent of such property is higher, thereby reducing the notional rent to be offered for tax and eventually reducing the overall tax liability,\u201d says Akhil Chandna, Director, Grant Thornton India LLP. Under the existing provisions of domestic tax laws, in case an individual owns multiple house properties, it is at the option of such individual to treat any of the house property as \u2018self-occupied\u2019 with nil annual value and offer other house properties to tax at notional rental value, i.e. reasonable rent a property can fetch if actually rented out. In the instant case before the Mumbai bench, the taxpayer treated a respective house property as \u2018self-occupied\u2019 at the time of filing his tax return and later during his tax assessment, he opted to change the same with other house property with low notional rental value. \u201cThis move was not allowed by the tax officer on the ground that making any such modifications during a tax assessment isn\u2019t permissible under the law. On the contrary, the ITAT in its order stated that tax provisions related to \u2018Income under the head House Property\u2019 nowhere state that once selecting a house property as \u2018self-occupied\u2019, the taxpayer cannot make any subsequent change(s),\u201d says Chandna. Tax provisions related to multiple house properties Before taking a look at this case in detail, let\u2019s begin with the tax provisions related to self-occupied, 'let out' or 'deemed to be let out' properties under the Income Tax Act. In case of a let out property, the rental income is taxable under the head 'Income from House Property'. Surprisingly, even if the property is not actually let out, still it is treated as deemed to be let out if you have more than one house property. \u201cIncome tax is payable on notional rent from such properties. However, a standard deduction of 30% along with other deduction of municipal tax is permitted from the notional or actual rental income, whereas in case of a self-occupied property, the notional rent is termed as annual value which is always nil in these properties,\u201d says CA Abhishek Soni, Founder, tax2win.in. Further, you can avail the deduction of interest paid on home loan from all kinds of house properties, be it self occupied, let out or deemed to be let out. Therefore, \u201ctaxpayers opt to choose that house property as \u2018self-occupied\u2019 which has more annual value in comparison to the annual value of other properties which he owns. The reason being the annual value becomes nil and lowers the tax out-go. This provision enables him to mitigate his tax liability to a great extent,\u201d says Soni. Since the assessee has the choice to select which property is to be treated as self occupied, therefore in some cases some issues arise with the I-T authorities. In view of such disputes, a recent judgement has been passed by the Mumbai bench of the Income Tax Appellate Tribunal (ITAT). Now, let\u2019s discuss what the case was about and what did the ITAT upheld. Mr. Venkatavarthan N Iyengar had three house properties, which were located at Juhu, Santacruz East and Vasai. He decided his Vasai property as \u2018self-occupied\u2019 and declared accordingly in his income tax return (ITR). Afterwards, during his tax assessment, he chose his Juhu property as \u2018self-occupied\u2019 instead of his Vasai property, but the I-T official was not satisfied and held that such a change was not permissible. Later, the dispute finally reached the bench of ITAT. Mr. Iyengar submitted to the ITAT that it is at the option of the assessee to determine which property is to be treated as \u2018self-occupied\u2019 and nowhere the I-T Act prohibits the substitution of the self-occupied property. Finally, the ITAT also in its order upheld the submission of the assessee and said, \u201cThe I-T Act nowhere states that the option of choosing a self-occupied property, once exercised, cannot be changed.\u201d Further, the I-T officer was directed to accept the submission by the assessee and treat his Juhu property as self-occupied. Conclusion: If an assessee declares a particular house property to be self-occupied in his ITR, \u201cthen during the actual tax assessment of his case he can substitute this with another house property owned by him, which perhaps has more value. Thereby, it becomes possible for him to reduce the notional rent that has to be offered for tax and thus lower his tax outgo,\u201d says Soni. Thus, tax experts say, the above ruling is a welcome move for bonafide taxpayers as it reiterates the fundamental rule of not recovering tax more than that a taxpayer is actually liable to pay under the law.