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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

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Income from House Property

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  1. Income from House Property Lecture Notes

  2. 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

  3. 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)

  4. 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)

  5. Annual Value • B) Rent Received/ Receivable • Rent for the period the property • is available for letting XX • Less : unrealised Rent XX • XXX

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

  7. 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

  8. 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

  9. 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

  10. 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

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