How to Calculate Income or Loss From House Property for IT Returns

In an earlier post, I explained how to file your IT returns online via the IT Department’s website.

This year, the IT Dept. has modified the most common ITR-1 form to include a field for “Income/loss from House Property”, something which was earlier only available in ITR-2. This allows tax payers to declare income or loss for up to a single house in the ITR-1 form itself, instead of having to file the more complicated ITR-2 form.

Income from House Property in ITR

This excellent move greatly simplifies the IT return filing process for a large number of people who don’t have any source of income other than salary and interest income, but are paying EMIs on a housing loan for one house. It also helps people who have income from rent received from a single let out property. Both these people can now declare their rent income and/or interest payments in the ITR-1 form itself.

But how do we calculate the income or loss from our house property? Here is the procedure as per the IT Dept. (click to enlarge):



Income from House Property calculation

For rented/let-out properties:

  1. In (a), enter the total rent which should have been received during the year for the property. This includes the actual rent received, plus that which was due but not received for whatever reason.
  2. In (b), enter the amount of rent which was due but not received during the year.
  3. In (c), enter the tax paid to local authorities, such as Property Tax.
  4. Calculate (d), (e) and (f), which are self explanatory.
  5. In (g), enter the total interest paid towards any home loan taken on that property. Unlike self-occupied property, there is no limit for properties that are rented out.
  6. Calculate (h) and (i) as shown. Assuming no rent arrears from previous years, the value of (i) is your total income/loss from house property and should be entered into Row 2 of the ITR-1 form.

For self-occupied properties:

  1. Since the house is self-occupied, you can neither declare any rent earnings, nor claim deduction for Property Tax or any other local taxes. So rows (a) through (f) will be empty.
  2. The only deduction you can claim for self-occupied property is interest payment towards home loan for the property. This too is limited to Rs. 1,50,000 per year. This must be entered in (g).
  3. The total income/loss from house property will be the interest payment amount entered in (g). This has to be mentioned in Row 2 of ITR-1 form as a NEGATIVE VALUE, so it will be deducted from the taxable income.

NOTE: In case you own more than one property, the above calculations must be repeated for every property, and the total income/loss from all of them should be declared in Row 2. You would also need to use ITR-2 form instead of ITR-1 if you own more than one property.


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16 Comments

  1. ShitalShital08-25-2015

    Hi Vijay,

    The property in question is in Ahmedabad – Naroda Kathwada road. I’m not sure how to know the municipal value of the property. Can you inform how to check it? My house in not self-occupied and I have not rented the same. So this would be a deemed letable property. SO in the Annual Letable Value (ALV) and Rent that cannot be received, am I supposed to update Zero or say a deemed value like 24000 (considering rent of 2k p.m.) for ALV and Rent not received.

    Look forward to your guidance please.

  2. Pravin DholePravin Dhole07-28-2014

    Dear Vijay
    I am salaried person
    1) 1st House- Self occupied ( I am staying in it) No Loan. So no EMI.
    2) 2nd House- Loan- Paying EMI- Rented out getting income.
    3) 3rd House got possesion in July 2014-Loan- Paying EMI- Not rented- no income.
    which ITR to be filled?How will be tax calculation.

    Regards
    Pravin Dhole

  3. VimalVimal02-07-2013

    Under the Loss of.income.for house property, I have following queries:

    1. The house was going thru maintenance and furnishing and thus no income of rent. Can I give self declaration of Zero Rental as Income.

    2. This house is bought in the current FY, Can I show the Registeration and Stamp Duty as losses and expenses in the current year, under the Tax Headings.

  4. Kartik SenapatiKartik Senapati08-07-2012

    After filing the return online, how do I send the certificate of interest on Bank loan, to income tax authorities? In my form 16, there is no mention about housing loan since deductions towards loan is not done through salary.

  5. JayJay07-16-2012

    https://incometaxindiaefiling.gov.in/portal/individual_huf.do

    If you look at above link of ITR site, it clearly indicates that for hose property profit/loss we have to fill ITR-2.’

    • Vijay PadiyarVijay Padiyar07-16-2012

      That link is outdated. You can use ITR-1 for upto 1 house property. The ITR-1 itself has a section for “Income from one house property”.

  6. K PardhasaradhiK Pardhasaradhi07-12-2012

    Hi Vijay,

    Really good work. Thank YOu.
    I have a doubt on property tax. I have not paid property tax so far since Khata Transfer is not yet over. But, I have to pay it in the year 2012-13 after Khata transfer. Please explain me whether I have to deduct property tax payable from Income/loss on House Property for the year 2011-12 or total tax paid in the next year.

    With Regards
    Pardha Saradhi

    • Vijay PadiyarVijay Padiyar07-12-2012

      You can claim deduction for Property Tax only if you have paid it yourself, and if the house is rented out. You cannot claim it for self-occupied property.

  7. VandanVandan07-10-2012

    Hi Vijay,
    Nice & useful post.
    I have purchased a house and it is under construction. I have also taken a home loan. I want to ask u some questions:
    1. whether I can claim tax-rebate for home-loan principal amount and interest amount even if house is under-construction.
    2. or I can claim only principal amount under 80C.

    Plz explain.

  8. MuthukumarMuthukumar06-27-2012

    HI, I build a house in my native place by taking home loan and the house construction is over. I am paying interest for it.
    I am getting loss on house property in -ve
    my question is which form ITR1 or ITR2 i need to use for AY 2012-2013? why i am asking is still i am confused little bit on this.

    • Vijay PadiyarVijay Padiyar06-27-2012

      For single house property, you can use ITR-1. Enter the negative value in Row (2) in ITR-1 (Income from house property).

      • SachinSachin07-26-2012

        Hello,
        Thanks for clearing many doubts πŸ™‚
        Sorry for reiterating same question:
        In ITR-1 we can see only following row:
        Income from one House Property 2
        It does not have special columns(as seen in ITR2) for ‘Interest payable on borrowed loan’ etc. So is it ok to to use ITR1 as you mentioned to fill in the home loan interest value in NEGATIVE?
        Till now, everywhere I got the impression that we need to fill ITR2 if we have home loan interest deduction and observed that I am not really using anything apart from the housing loan.
        So after reading your post it makes sense, but just wanted to confirm πŸ™‚
        Thanks again!

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