Income from House Property |
In case of all assesses, "Income
from house property" shall be computed as under.
A. In the case of Let Out
Property [Whether for residential purpose or for business purpose]
The annual value of any property
shall be deemed to be
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The sum for which property might
reasonably be expected to let from year to year or
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When property or any part of
property is let, the annual rent received/receivable less unrealised rent or the sum as
above, whichever is higher.
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Where property or part of it is
let and was vacant for whole or part of year, and rent received/receivable less unrealised rent is less than the sum as per (i) above due to the vacancy, then the rent
actually received/receivable.
Deduction shall be allowed as
under:
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Nature of
Deduction
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Section
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Limit/Condition
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1
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Municipal Tax, etc.
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23(1) First proviso
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Only if borne and paid by the
owner.
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2
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Standard deduction
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24 Clause (a)
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30% of Annual Value.
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3
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Interest on borrowed
capital
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24 Clause (b)
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Interest payable on capital
borrowed for the purpose of acquisition, construction, repair, renewals or
reconstruction only.
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Interest for the period prior to
acquisition or construction would be deductible in five equal installments from the
year of acquisition or construction.
B. In the case of oneself-occupied
house property
The annual value of a self-occupied
house or part of such house shall be nil. Further deduction shall be allowable as
under:
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Nature of
Deduction
|
Section
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Limit/Condition
|
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Interest on borrowed
capital
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24 Clause (b)
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1,50,000/- from A.Y. 2002-03 onwards, provided,
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i. property is acquired or
constructed on or after 1-4-1999 and such acquisition or construction is
completed within 3 years from the end of the financial year in which capital
was borrowed.
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ii. A certificate from the
lender certifying interest payable to him is furnished by the
assessee.
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In other cases,
30,000. Interest in excess of above may qualify for rebate u/s. 80C(2)(xviii)
(Re : Krishnan Kuppuswami vs. ITO 74, Taxman 289) (Pune Trib.). No other
deduction allowed in respect of one self-occupied property whose value is taken
at NIL.
From A.Y. 2014-15, additional
deduction is available to an individual up to 1,00,000/- for interest payable
on housing loan – see section 80EE for further details.
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Only one house according to
assessee’s choice is treated as self-occupied and deduction mentioned in B will
be allowed. In respect of all other houses, even though self-occupied, notional income
as stated in A(i) above will have to be computed. In such cases, all deductions
mentioned in ‘A’ would be available.
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D. Please
click here for set off
and carry forward of losses.
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E. Property owned by
co-owners
Where property consisting of
buildings or buildings and lands appurtenant thereto is owned by two or more
persons and their respective shares are definite and ascertainable, such persons
shall not be assessed as an A.O.P. (Association of Persons) but the share of each
person in the income from the property as computed u/ss. 22 to 25 (i.e., Income
from house property) shall be included in his total income.
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F. Arrear of Rent – S.
25B
Arrear of rent received in
respect of let out property, if not charged to tax in earlier previous year, is
taxable in the year of receipt after deducting 30% of such amount for repair,
etc.
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