To report their income from residential property to the tax authorities, taxpayers must complete Form 12C, a necessary document. This guide offers a step-by-step process to complete Form 12C easily and accurately.
Providing personal information
Personal information has to be provided, such as name, address, Permanent Account Number (PAN), and contact information, is required in the first section of Form 12C (100 words). Ensure all the information is correct and current to avoid processing delays or fines.
Property Specifics
Taxpayers must provide detailed information on the income-generating property in the following phase. Include information on the property's address, use (self-occupied or rented), and ownership type (co-owned or single ownership). The taxpayer must provide each co-owners specific portion if the property is co-owned.
Annual Value Computation
The annual value of the property refers to the potential rental income it might generate over the course of the fiscal year. Put "Self-Occupied" in the relevant field if the property is self-occupied. If it is rented out, the actual rent paid or anticipated rent must be disclosed. Mention the anticipated rent following the tax regulations for deemed let-out property, which is not rented but is thought to be on rent.
Deductions and Exemptions
The taxpayer might use deductions and exemptions in this section to lower the taxable income from the real estate investment. There is a cap on the amount of interest on a house loan that can be deducted under Section 24. In addition, maintenance costs are deductible at 30% of the annual value. No home loan interest can be deducted if the property is self-occupied.
Loss from House Property
The taxpayer may report a loss from the house property in this section if the overall deductions are greater than the annual value and the result is a loss. Such losses may be carried forward and offset by future housing property rental revenue.
Verification and Submission
The declaration must be signed after the submitted information has been confirmed. Double-check for any typos or omissions and make sure all the information is correct. The taxpayer can hand deliver or submit the paperwork online to the tax authorities after ensuring everything is correct.
Accurate reporting and close attention to detail are necessary when completing Form 12C for income from home property. Taxpayers can ensure compliance with tax laws and lower their risk of mistakes, penalties, or processing delays by carefully following this step-by-step guidance. It is crucial to keep up with any changes to the tax code and, if necessary, seek professional guidance.
