Budget 2019: No tax on notional rent
So far, notional rent income has to be declared on 2nd home if it was vacant.
Hyderabad: Interim finance minister Piyush Goyal played Santa vis-a-vis renting of two homes in this Budget.
His exemption of income-tax on notional rent on a second self-occupied house is going to benefit techies and people who shift locations for work.
“Income tax on notional rent is payable if one has more than one self-occupied house,” Mr Goyal said in his Budget speech. “Considering the difficulty of the middle class in maintaining families at two locations on account of job, children’s education, care of parents etc. I am proposing to exempt levy of income tax on notional rent on a second self-occupied house.”
At present, if one has a second home, a notional rental income has to be declared if the owner is unable to find a tenant or wants to keep the house vacant.
As a result, the individual has to pay tax even if the second house is not fetching any money.
Experts note that tax deduction at source on paid rent benefits landlords, who depend on rental income. Federation of Telangana and Andhra Pradesh Chambers of Commerce and Industry senior vice-president Karunendra S. Jasti said, “It is a welcome move for a majority of Indians who stay away from home. Exemption of notional rent on second house is helpful for people who have houses in villages and reside in towns and cities.”
Hyderabad sees a lot of techies and people coming from different parts of the country. If the second self-occupied house is not to be notionally taxed, it will come as a big relief for the migrant populace.
Mr Harish Thota, a techie working at Hitec City, said, “The notional rent exemption is a welcome change, as it helps middle class people like us, as we have our families in two locations because of job constraints. But implementation needs to be done more carefully.”
Not only notion rent, but even the proposal to increase TDS threshold for deduction of tax from Rs 1,80,000 to Rs 2,40,000 is being seen as a welcome move. Rentals in the city have increased tremendously and landlords will benefit from this.
“We rely on rents and avoid taking money from our kids who are stationed elsewhere,” said Mr G. Krishna, a retired government employee. “Even though rents in Hyderabad have increased, all these days, this move will reduce the tax burden on us.”
Landlords are sometimes senior citizens who have made rents a retirement plan. Another techie, Divya Samhitha, said: “This move will benefit many landlords who are often senior citizens and completely dependent on rent. My parents completely rely on rent from home. So, increasing this limit certainly helps.”