Budget 2024: House Rental Income can't be declared as Business Income by Property Owners:

Budget 2024: House Rental Income can't be declared as Business Income by Property Owners If you want to save money on taxes, you cannot declare rental income from another property you may have invested in as business revenue. With the government now closing the loophole, the tax you would have to pay on the property you rented out would be significantly higher, especially if you had not declared it as rental income. According to tax experts, this is likely to prevent litigation while also ensuring that owners receiving a consolidated fee for providing services such as cleaning and lodging would no longer be able to claim all of their expenses and may face higher taxes. FM Nirmala Sitharaman stated on July 23 that some taxpayers were filing their rental income under the incorrect income tax head, profits and gains from business or profession, thereby lowering their tax due. "It has been noticed that some taxpayers report their rental income generated by letting out the house property under the heading 'Profits and gains of business or profession' rather than 'Income from house property'. As a result, they are significantly decreasing their tax due by reporting house property income under the incorrect head of income," she stated. She stated that the change will take effect in the following financial year. Tax experts have applauded the change, stating that it provides stability and consistency, while before taxpayers used different tax methods. Such clarity is likely to reduce litigation while also creating a more stable and predictable tax environment.