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House Property

The document discusses income from house property under the Indian Income Tax Act. It covers conditions for taxability, calculations for let out house property including gross annual value, deductions, and interest on borrowed capital. It also covers calculations for self-occupied house property.

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Arjun Suresh
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4 views5 pages

House Property

The document discusses income from house property under the Indian Income Tax Act. It covers conditions for taxability, calculations for let out house property including gross annual value, deductions, and interest on borrowed capital. It also covers calculations for self-occupied house property.

Uploaded by

Arjun Suresh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Income From House

Property
Conditions for taxability
• Assessee is the owner
• Property consists of building or land+building
• Should not be used by owner for business purposes
• Examples:
• X owns a building. It is given on rent. Income of the property is taxable
under the head “Income from house property”, as the three conditions are
satisfied.
• Y owns a building. It is used by him for carrying on a business or he uses the
building as his office/factory/ godown. In this case, no income is taxable
under the head “Income from house property”, as one condition is not
satisfied.
Let out House Property
Gross annual value # xxxx
Less : Municipal taxes(borne, paid) xxxx
Net annual value xxxx
Less : Deductions under section 24
- Standard deduction (30% of NAV) xxxx
- Interest on borrowed capital * xxxx
Income from house property xxxx

# GAV: Higher of rent actually received or reasonable expected rent


*To the extent that loss from this head restricted to Rs. 2 lakhs
Interest on Borrowed capital
• Capital is borrowed for the purpose of purchase, construction, repair,
renewal or reconstruction of the property.
• Interest on borrowed capital is deductible on “accrual” basis. It can be
claimed on yearly basis, even if the interest is not actually paid during
the year.
Self Occupied House Property
• If assessee owns up to two houses, then annual value is taken as ‘nil’
if not let out on rent
• GAV, municipal taxes, NAV, standard deduction treated as nil
• Interest on borrowed capital allowed on payable basis
• Upto Rs. 2,00,000
• For acquiring or constructing property
• Acquisition/construction to be completed within 5 years of borrowal

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