InvestorQ : I heard the FM abolished notional rent on second house. What does this mean?
Ishita Jain made post

I heard the FM abolished notional rent on second house. What does this mean?

Pratik vyas answered.
3 years ago
What you have heard is completely correct. In a move welcomed by most home owners across the country, the finance minister abolished notional rent on the second house owned by individuals. Currently, those individuals who have more than one house have to pay tax on the house the individual is not residing in, because the assumption is that the second house is let out. Thus, you are expected to pay tax on your second house. Thus, an individual was required to pay tax on the notional rental income (calculated as per tax rules) on a house, even if an individual’s second house was lying vacant. This was because the second property was treated as a deemed-to be let out property and treated as a rented property even if it is not given on rent, as per current income tax laws. However, the Finance Minister extended the benefit of the self-occupied house to the second house in the Union Budget. He said: 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. I am proposing to exempt levy of income tax on notional rent on a second self-occupied house.” This means that now an individual will not have to pay any tax on notional income on a second house property.