Transcript Income from House Property

Income from House Property
Lecture Notes
Section 22: Basis of
Charge
 Income is taxable under the head “Income from
House Property” if the following three
conditions are satisfied: i) The property should consist of any building or land
apparent thereto
 ii) The assessee should be owner of the property
 iii) The property should not be used by the owner for
the purpose of any business or profession carried on
by him, the profits of which are chargeable to income
tax
Deemed Owner
 Section 27 provides that following will be deemed
owner of the house property for the purpose of
charging tax on Annual Value.
 i) Transfer to spouse or minor child
 ii) Holder of impartible estate
 iii) Property held by a member of Co-operative Society
 iv) Person who has acquired a property under Power of

attorney transaction
 v) Person who has acquired the Right in Property

u/s 269 UA (Property held on lease exceeding 12

years)
Annual Value
 A) Reasonable Expected Rent
 a) Municipal Valuation
xx
 b) Fair Rent
xx
 c) Standard Rent
xx
(a) or (b) whichever is high XXX

subject to Maximum ( c)
Annual Value
 B) Rent Received/ Receivable
 Rent for the period the property
 is available for letting
XX
 Less : unrealised Rent
XX

XXX


Annual Value
 C) : (A) or (B) whichever is high xxx
 Less : Loss due to Vacancy
 D) Gross Annual Value

XX
XXX
Net Annual Value
 Gross Annual Value
 Less : Municipal Taxes paid by owner

Net Annual Value
 Less : Deduction u/s 24

i) Standard Deduction

( 30 % of Net Annual Value)

ii) Interest on Loan

Income from House Property
XXX
XXX
XXX
XX
XX
XX
Self Occupied Property
 Any one House Property occupied by the
assessee for the purpose of residence is
taken as SOP
 Annual value of SOP is Nil
 There is no deduction for SOP u/s 24
except interest on Housing Loan
Interest of Housing Loan
for SOP
 Interest is allowed upto a Maximum of the following
limits for SOP :
For Loans on or after 1.4.1999 :
- For Purchase/ Construction : Rs 1,50,000
- For Repairs & Renewals
: Rs 30,000
For Loans Prior to 1.4.1999 :
- For any purpose
: Rs 30,000
Pre Construction Interest
 Interest during the Construction period is accumulated
and allowed as deduction in5 years
 Pre Construction Period = Date of Loan

to 31st March immediately before Completion.
 Interest
= Loan X Period X Rate/100
 Deduction = Total Interest / 5