Allowing 2 Self-Occupied House Properties: A Welcome Move by Finance Bill 2025

The Budget 2025 has introduced a significant change in the taxation of house properties. As per the new provisions, an individual can claim exemption from taxation for two self-occupied house properties(earlier there was relief subject to certain conditions in case of 2 residential properties now those conditions have been totally relaxed). This move is expected to provide relief to taxpayers who own multiple residential properties.

Background
Prior to the Budget 2025, an individual could claim exemption from taxation for only one self-occupied house property. This meant that if an individual owned multiple residential properties, they would have to pay taxes on the deemed rental income from the additional properties.

New Provisions
As per the Budget 2025, an individual can claim exemption from taxation for two self-occupied house properties. This means that if an individual owns two residential properties, they will not have to pay taxes on the deemed rental income from the second property.

Examples
Let’s consider a few examples to illustrate the impact of this change:

Example 1
Mr. A owns two residential properties, one in Mumbai and another in Pune. Both properties are self-occupied. Prior to the Budget 2025, Mr. A would have had to pay taxes on the deemed rental income from the second property. However, as per the new provisions, Mr. A can claim exemption from taxation for both properties.

Example 2
Ms. B owns three residential properties, two in Delhi and one in Bangalore. Two of the properties are self-occupied, while the third is rented out. Prior to the Budget 2025, Ms. B would have had to pay taxes on the deemed rental income from the second self-occupied property. However, as per the new provisions, Ms. B can claim exemption from taxation for two self-occupied properties.

Conclusion
The Budget 2025 has introduced a welcome change in the taxation of house properties. By allowing individuals to claim exemption from taxation for two self-occupied house properties, the government has provided relief to taxpayers who own multiple residential properties. This move is expected to benefit individuals who have invested in multiple properties for self-occupation.