The Budget 2019 proposed by the Finance Minister Piyush Goyal has granted two major reliefs to the persons being taxed under the head house property income.
Firstly, the budget proposes to exempt the levy of income tax on notional rent on a second self-occupied house. Currently, income tax on notional rent is payable if one has more than one self-occupied house. However, the persons already receiving rent from the second property may not get this exemption as the budget proposes to exempt ‘notional income’ only.
At present, ‘income from House Property’ is the only head of income taxed on a notional basis.
Also, the TDS threshold for deduction of tax on rent to be increased from Rs. 1,80,000 to Rs. 2,40,000.
Under the Income Tax Act, it is mandatory for an individual or Hindu Undivided Family (HUF) paying a monthly rent of more than Rs 50,000 to a person who is an Indian resident to deduct and deposit TDS (Tax Deducted at Source) @5% under Section 194-IB of the Income Tax Act 1961 at the time of credit of rent, for the last month of the financial year or in the month in which the premises is vacated or the agreement is terminated.
Further, the tax exemption period on notional rent, on unsold inventories, extended from one year to two years