The income tax return (ITR) filing season has gathered pace, and the questions related to the filings are mounting. One of the query is about the rental
tax on rental income. Renal income may not necessarily be from one source. It is possible that rental income is coming from two or more properties. This is likely for retired people or individuals living off inherited property. The obligation to pay taxes on rental income depends on several factors such as the amount received each year, available deductions and the taxpayer's overall tax position. ITR-1 (Sahaj) form: Many salaried taxpayers earning rental income are discovering that not everyone can opt for the simplified ITR-1 (Sahaj) form. Notably, ITR-1 is meant for resident individuals with a total income of up to Rs 50 lakh from salary, one house property and other sources such as interest. However, taxpayers earning rental income from more than one house property are not eligible to use ITR-1 and must instead file ITR-2. The eligibility largely depends on the number of house properties they own and the nature of their rental income.
