While presenting the Budget 2019 for FY 2019-20, Finance Minister Sh Piyush Goyal has proposed to exempt second self-occupied house property from tax liability on account of notional rent of such house property as deemed rental income under Section 23 of the Income Tax Act, 1961.
In view of the fact that if more than one self-occupied house property is owned by a taxpayer, only one is treated as a self-occupied property by choice of taxpayer and the other one is considered as let out. However, as per Budget 2019 proposals, such second self occupied property shall not be subjected to tax liability for deemed rental income.
Currently, income tax on notional rent is payable if one has more than one self-occupied house. Considering the difficulty of the middle class having to maintain families at two locations on account of their job, children’s education, care of parents etc., Finance Mister has proposed to exempt levy of income tax on notional rent on a second self-occupied house.
Now an assessee can claim that he has two self-occupied house properties and hence deduction with respect to interest on borrowed capital for self occupied house property can be claimed with respect to both the houses. However, there is no change in the aggregate limit for the deduction on account of interest which remains the same, i.e., Rs. 2,00,000.