Income Tax: Only 1 house can be declared as self-occupied by husband and wife as joint owners

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New Delhi | Published: July 4, 2018 2:00:01 AM

Only one property can be declared as self-occupied house property by the joint owners which is occupied by them and all other properties shall be deemed to be let-out for the purpose of computation of income under the head ‘house property’.

tax, income taxFunds received on the maturity of ELSS will be taxed as capital gains in excess of Rs 1 lakh.

* If husband and wife are joint owners of two house properties, can each of them treat both properties as self-occupied separately?
—Ashutosh Kumar
Only one property can be declared as self-occupied house property by the joint owners which is occupied by them and all other properties shall be deemed to be let-out for the purpose of computation of income under the head ‘house property’. In your case assuming both of you would be residing in the same house, each of you cannot claim to be occupying a different property for tax purposes. However, if the owner of the property is residing at any other property, not belonging to him, due to reason of employment, then such other joint owner has an option to treat any one of the property as self-occupied. But if this is not the fact in your case, it is not advisable to present wrong facts in the ITR.

* How is free electricity units given to employees by electricity board taxed? What if it is given to SC/ ST/ OBC?
—Dhruv Kashyap
Certain benefit given to employees are taxed as perquisites. Provision of facilities like supply of gas, electricity and water by employer to its employee is treated as a taxable perquisite under I-T Act. There are no different provisions in the Act in case employer is electricity board. However, the issue is litigious as the tax authority treats free electricity given by electricity board to its employees as taxable perquisites, whereas, the courts have taken different view depending upon the facts of the case.

* I’ve been investing in ELSS MF. One of the funds is over four years. If I redeem now, how should I show it in the return and get exemption?
—Advik Chauhan
Funds received on the maturity of ELSS will be taxed as capital gains in excess of Rs 1 lakh. ELSS, which comes with a mandatory lock-in period of three years, used to offer tax-free returns. However, after the re-introduction of Long Term Capital Gain (LTCG) tax in the budget, returns from it would be taxed. LTCG from equity mutual funds above `1 lakh would be taxed at 10% without any indexation benefit. All gains until January 31, 2018 have been grandfathered. So the new cost of holding your equity MF is the closing price on January 31, 2018.The gains are required to be reported in ITR unless the total income is below the threshold limit.

The writer is partner, Nangia Advisors LLP. Send your queries to fepersonal finance@expressindia.com

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