There are a number of reasons why people buy immovable property in joint names and saving taxes is one of them. If you have read about the tax laws, you would know that if you are buying a property jointly, both of you can enjoy additional tax benefits individually. And it is not necessary that the property is held jointly by just the spouse or family members. It can also be held jointly with your friend, relative, and even your business partner or associate. However, it orders to file the ITR for your jointly owned home, there is a new ITR form around the corner. There have been a few major changes in the way the ITR was filed before and if you are also holding property jointly, you need to know about these ITR returns. Now, there have been a few alterations in the way the tax returns were filed and instead of simply filing the ITR-1 form, there are a few changes that are required.
As per Section 26 of the Income Tax Act, there are clear guidelines about the taxations that are easily shared between the co-owners of the property that is jointly owned. Usually, the government gives away a notification regarding the ITR form filling for the consecutive financial year. This year, the IT department has given away two specific changes in the form of filling. These are:
If you are a joint owner of a property, you cannot individually fill form ITR-1 or ITR-4. These were the simpler forms that made ITR filing easier for individuals.
Taxpayers, who have already deposited crore or more or have spent above 1 lakh on electricity or foreign travel would not be able to file ITR-1.
These individuals, who fall in either of the two categories, would have to file another form, which is not yet notified by the IT Department. As per the notification, released by the Income Tax Department, a return of income would need to be furnished by the individual who ‘owns a house property in joint ownership with two or more persons’.
While usually the ITR forms for filing returns are notified on January 3 each year, the filing of forms for jointly owned property has not been notified yet.
As per Naveen Wadhwa of Taxman, “Only the forms have been notified without the return filing utility. Thus, a taxpayer, who is required to file the return before the previous year ends, cannot do so until the return filing facility is activated on the e-filing portal.”
In a statement issued by the Central Board of Direct Taxes (CBDT), concerns were raised around the hardships that the individuals owning property jointly would have to face post this decision. The statement read as, "After the notification, concerns have been raised that the changes are likely to cause hardship in the case of individual taxpayers.”
It has been further believed that the people of jointly owned property would face even more hardship as ITR-1 and ITR-4 are easy to file whereas now they would be required for filing detailed forms for income tax return. They even have a concern that they would not even have the option to file the simple ITR-1.
Going by the statement that was issued for the changes in the ITR form filing, "it has been decided to allow a person, who jointly owns a single house property, to file his/her return of income in ITR-1 or ITR-4 Form, as may be applicable, if he/she meets the other conditions".
For details, click: Know all about Joint Property Ownership.