Your income from letting out of a house or part of your house will henceforth not be charged under the head ‘profits and gains of business or profession’. Instead, it will be chargeable only under the head ‘income from house property’. The government announced this change in tax regulation in the Union Budget 2024.
It is proposed that income from letting out of a house or part of the house by the owner, shall not be charged under the head ‘profits and gains of business or profession’ and will be chargeable to tax under the head ‘income from house property’ only, reads the Budget document’s Annexure to Part B.
Income under house property
Many landlords tend to show their income from rentals under the wrong head ‘business and profession’ instead of house property only. Stopping this practice is one of the initiatives that the government has taken to plug the tax loophole.
As a result of this tweak, the income under the house property head will rise if the taxpayer has so far been declaring it under the head ‘business/profession’.
Finance Minister Nirmala Sitharaman also announced a ₹2.2 lakh crore boost for urban housing. Under PM Awas Yojana, three crore additional houses will be built in rural and urban areas in the country.
A number of other initiatives are being taken to check tax avoidance. One involves a higher securities transaction tax on futures and options, while another involves the transfer of capital assets.
The Budget 2024 also proposed that the transfer of a capital asset, under a gift or will or an irrevocable trust, by an organisation will be regarded as transfer for the purpose of calculating capital gain.
Likewise, there are some other anti-avoidance moves which include TDS on payment to a partner.