INCOME TAX (Applicable for MAY’22/JUNE’22/NOV’22/DEC’22)

INCOME FROM HOUSE PROPERTY

Conditions to be fulfilled for the purpose of charging any income under this head (SECTION
22):
 Property must consists of any building or land appurtenant thereto –
a) Building include building constructed on leasehold/rented land
b) Rent of vacant land – taxable under IOS.
 Assessee must be the owner of such property -
a) Free hold and leasehold rights and deemed owner also covered.
b) Ownership must exist in P.Y.
 The property can be used for any purpose except for the purpose of business or
profession of the assesse –
a) If business of letting then taxable as business income.
b) If used for own business then not taxable under IHP or business income.
 Property held as stock in trade etc – Annual value in case of IHP. Builders ke pass 2
years ka time hai tab tak vo annual value NIL claim kar sakte hai from the end of the
financial year in which certificate of completion of construction was obtained.
Exemptions:
 Sublet receipt – taxable under IOS.
 Principal of mutuality – agar assessee ke upper apply hota hai toh IHP pe bhi
applicable hoga.
 Letting is incidental to main business – taxable under PGBP
 Assessee’s property used for his partnership firm – not taxable under this head. But if
property is owned by HUF is given on rent to firm in which members of HUF are
partners in their personal capacity, the taxable under IHP in the hands of HUF.
DISPUTED PROPERTY: person who receives income or enjoys the possession of property are
aseessable to tax under IHP.
COMPOSITE RENT:
Tax treatment:
1) Composite rent including rent for letting out of property as well as rendering of services –
 Two different line of activities – apportioned as IHP and business income.
2) Two activities they form single activity –
 main intention letting – IPH
 main intention to exploit the immovable property by way of commercial complex
– PGBP
3) Composite rent including rent for letting out of building as well as other assets like P&M,
furniture:
If letting of property is inseparable : entire income as PGBP or IOS
If letting of property is separable : rent under IHP & rent from other property under
PGBP or IOS.

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 INCOME TAX (Applicable for MAY’22/JUNE’22/NOV’22/DEC’22)

COMPUTATION OF ANNUAL VALUE (SECTION 23)

Particulars Amount (Rs)
Fair rent (a) -
Municipal Rent (b) -
Whichever is higher (a or b) (c) -
Standard Rent (d) -
Expected Rent /Whichever is lower (c or d) -
(e)
Actual rent received/receivable (ARR) (f) -
(GAV) Gross annual value/whichever is higher (e or f ) -
Less : Municipal Taxes -
Net annual value (NAV) -
Less: Deduction u/s 24:
Standard Deduction (30% of NAV) -
Interest on loan -
Income from House Property -
Notes:
 Agar ARR, ER se cum hai due to vacancy (matlab khali rehene ke karan) toh GAV =
ARR.
 Municipal taxes sirf jo owner pay karta hai vahi minus hota hai chahe jitney saal ka
bhi pay kare.
 Unrealised rent(UR) (jo dub gaya hai) shall be deducted from ARR. UR ki 4 conditions
fulfill honi chahiye tabhi deduct hoga.
 ARR exceed PER (proportionate expected rent) se due to vacancy toh GAV = ARR, PER
ka matlab utne mahine ka proportionate expected rent jitney mahine property rent pe
hi.
 ARR less than PER ( vacancy ke alawa koi kaaran se eg: self occupied raha) then GAV =
ER for 12 months.
 If property vacant for whole year then annual value shall be NIL.
 Section 23(2) ke hesab se two ghar ka selfoccupied ya unoccupied house property ki
annual value nil lenge. (individual, huf)
 Agar house property kuch samay let out and kuch samay self occupied toh annual
value NIL nahi lenge. (eg: 4 months raha 8months let out toh pura 12months let out
mana jayega) and actual rent ko excepted rent of 12months se compare karke GAV
nikalenge.
 Half portion let out/half portion self occupied the dono ko alag alag maan ke tax
lagayenge.
DEDUCTION FROM ANNUAL VALUE(SECTION 24)
(I) Standard deduction – 30% of NAV

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 INCOME TAX (Applicable for MAY’22/JUNE’22/NOV’22/DEC’22)

(II) Interest on Loan

Pre – interest post – interest

Date of borrowing
To
(1) Date of repayment of loan
Or
(2) Jis saal construction complete hua usase phele
Wale saal ke financial year ki last date i.e
31st march (eg. Construction complete on
14/02/2020 then our date will be 31/3/2019)

(1) & (2) whichever is earlier

This is all for pre-interest

After this all interest is for post period

INTEREST ON LOAN LIMIT [SELF OCCUPIED]

Rs 2,00,000 Rs 30000

Acquisition or construction within 5 years from

The Date of borrowing
(+) if condition
Certificate furnished by assessee for the interest not satisfied
Amount paid
And
Loan on and after 1/4/1999

New loan also covered for payment of old loan

Repair, renewal or reconstruction main Rs 30000 milega.
Interest include service fees or other charges in respect of money borrowed.
Interest on unpaid interest is not deductible.
Pre – interest 5 installements main milta hai from the date of completion.

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 INCOME TAX (Applicable for MAY’22/JUNE’22/NOV’22/DEC’22)

AMOUNT NOT DEDUCTIBLE (SECTION 25):

Any interest payable (shall not be allowed)
 Which is payable outside India,
 On which tax has not been deducted or paid
 Jo non resident ka agent nahi hai
PROVISION FOR ARREAS OF RENT AND UNREALISED RENT RECEIVED SUBSEQUENTLY
(SECTION 25A)
Amount received as Arrears of rent and unrealised rent -
Less: standard deduction 30 %of such amount -
Income from house property -
Jis financial year me received hoga ussi financial year me taxable hoga chahe property ho ya
nahi vo.
PROPERTY OWNED BY CO-OWNERS (SECTION 26)
a) Shares are definite and ascertainable – each person will be treated as separate and
will be taxable. (haar chije dono ki alag alag hogi jaise ki interest ki limit and self
occupied ki limit)
b) Unascertainable shares – then will be taxed as AOP.
DEEMED OWNERSHIP (SECTION 27):
1. Transfer to spouse or minor child otherwise than for adequate consideration: An
individual who transfer otherwise than for adequate consideration his house property
to –
 His or her spouse, not being a transfer in connection with an agreement to live
apart; or
 Minor child, not being married daughter.
Shall be deemed to be the owner of the house property so transferred.
2. Holder of an impartible estate.
3. Property allotted under house building scheme.
4. Possession on part performance of contract.
5. Holder of substantial lease or other rights for not less than 12 years: A person who
acquires any rights (excluding any right by way of a lease from month to month or for
a period not exceeding one year) shall be deemed to be the owner of that building or
part thereof.
{Transfer means –
Transfer of property by way of sale or exchange or lease for a term of not less
than 12 years, and includes allowing the possession of such property to be
taken or retained in part performance of a contract.
Doing of anything which has the effect of transferring, or enabling the
enjoyment of, such property.}

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