One Can Claim A Maximum Of Two Properties As Self-Occupied

There is no provision for claiming exemption on maintenance charges paid, whether the property is self-occupied or let out. Profits made on shares gifted by your brother will be taxed as your income. Dearness allowance is taxable

Balwant Jain

Updated on: 18 November 2023 9:12 am

Properties, Profits, Dearness Allowance

I am a working with a company in Mumbai and stay on rent here. I own a flat in Delhi which is lying vacant at present. I am paying maintenance charges for the Delhi flat. Can I claim any deduction for maintenance charges paid for the Delhi flat?

Since a person can claim a maximum of two properties as self-occupied, so the flat in Delhi, which is lying vacant, can be treated as self-occupied. The annual value of a self-occupied property is taken as nil for taxation purposes. Since the annual value of the property in Delhi will be taken as nil, no further deductions will be allowed in respect of the self-occupied property, except for the interest if any loan is taken for purchase, construction or repairs etc. of that said property.

There is no provision under the tax laws for claiming exemption on maintenance charges paid, whether the property is self-occupied or let out. Please note that you can claim exemption on house rent allowance (HRA) against rent paid for the property taken on rent in Mumbai within prescribed limit, provided your employer is actually paying you HRA. In case HRA is not part of your salary, you can claim deduction for rent paid under Section 80GG of the Income-tax Act, 1961 up to a maximum of Rs 5,000 per month, subject to fulfilment of prescribed conditions.

My brother wants to transfer his equity shares valued at Rs 10 lakh to me. Will the value of shares being transferred taxable in my hand? If I do intraday transactions against those shares, will the gains be taxed in my hands or in my brother’s hands?

The proposed transfer of shares from your brother to you may either be for a consideration or without any consideration. In case the transfer is without consideration, this will be considered as a gift from your brother to you.

Though gifts are taxable in the hands of the recipient if the aggregate value of all gifts received during a year exceeds Rs 50,000 under provisions of Section 56(2) of the Income-tax Act, 1961, but there are certain exceptions to it, such as gifts from specified relatives, including siblings.

So, the gift of these shares from your brother to you will not be treated as your income and this transaction will not have any tax implication for either of you. The profits made on dealing with these shares, whether intraday or otherwise, will be taxed as your income and you will have to pay tax on profits made on such transactions.

I have recently joined government service. Will dearness allowance (DA) and HRA form part of my taxable income?

DA is taxable. As far as taxation of HRA is concerned, exemption can be claimed provided you are actually paying rent in respect of the property occupied by you and which is not owned by you. The exemption in respect of HRA is available up to the lowest of the following three, i.e., 50 per cent of the salary (if you are working in any of the metro city, else 40 per cent) b) rent actually paid in excess of 10 per cent of your salary and c) HRA actually received by you.

The author is a tax and investment expert

(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)