Which ITR form for rental income?

Which ITR form for rental income?

When it comes to rental income, taxpayers need to know which Income Tax Return (ITR) form to use. The ITR form for rental income depends on various factors such as the type of property, ownership, and other sources of income. In general, individuals and Hindu Undivided Families (HUFs) earning rental income should file their returns using Form ITR-1 or Form ITR-2, depending on their specific circumstances.

FAQs about ITR forms for rental income:

1. Can I use ITR-1 for rental income?

No, ITR-1 is not suitable for individuals earning rental income. It is best suited for salaried individuals, pensioners, and others with income from sources like salary, one house property, and interest income.

2. Who should use ITR-2 for rental income?

Individuals and HUFs with rental income from more than one property should use Form ITR-2 for filing their income tax returns.

3. Do I need to file ITR if my rental income is below the taxable limit?

Yes, it is advisable to file an income tax return even if your rental income falls below the taxable limit. It helps in establishing a financial record and may be required by financial institutions for loans or other transactions in the future.

4. How do I calculate taxable rental income?

Taxable rental income is calculated by deducting permissible expenses from the gross rental income. Expenses such as property taxes, maintenance charges, and interest paid on home loans can be deducted to arrive at the taxable rental income.

5. Can I claim deductions on rental income?

Yes, deductions such as standard deduction of 30% of the annual value of the property and interest paid on home loans can be claimed against rental income while filing income tax returns.

6. Is it mandatory to provide PAN details of tenants while filing ITR for rental income?

While it is not mandatory to provide PAN details of tenants when filing ITR for rental income, it is advisable to do so as it helps in establishing the authenticity of the rental income and may be required by tax authorities for verification.

7. Can I use presumptive taxation scheme for rental income?

Individuals earning rental income can opt for the presumptive taxation scheme under Section 44ADA of the Income Tax Act. This scheme allows for a flat deduction of 30% on rental income to calculate taxable income.

8. What documents are required for filing ITR for rental income?

Documents such as rental agreement, rent receipts, property ownership documents, maintenance bills, and interest certificate for home loan are some of the essential documents required for filing ITR for rental income.

9. Can I carry forward losses from rental income?

Yes, losses from rental income can be carried forward for up to 8 assessment years and set off against rental income in future years, subject to certain conditions.

10. How is TDS deducted on rental income?

If the monthly rental exceeds Rs. 50,000, the tenant is required to deduct TDS at the rate of 5% on the rental payment. The deducted TDS amount should be deposited with the government and the TDS certificate should be provided to the landlord.

11. Can I show rental income as income from other sources in ITR?

Rental income should be shown under the head “Income from House Property” while filing ITR, irrespective of whether it is earned from commercial or residential properties.

12. Can I revise ITR if I made a mistake in declaring rental income?

Yes, taxpayers can revise their income tax returns within a specified time limit if they made a mistake in declaring rental income or any other details while filing the original return.

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