Income from House Property

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Income from House Property

• Lecture Notes

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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

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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)

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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)

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Annual Value

• B) Rent Received/ Receivable
• Rent for the period the property
• is available for letting
  XX
• Less unrealised Rent XX
• 
  XXX

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Annual Value

• C) (A) or (B) whichever is high xxx
• Less Loss due to Vacancy XX
• D) Gross Annual Value XXX

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Net Annual Value

• Gross Annual Value
  XXX
• Less Municipal Taxes paid by owner
  XXX
• Net Annual Value
  XXX
• Less Deduction u/s 24
• i) Standard Deduction
• ( 30 of Net Annual Value)
  XX
• ii) Interest on Loan
  XX
• Income from House Property
  XX

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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

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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

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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