INCOME FROM HOUSE PROPERTY (INCOME TAX)

Charging (Sec. 22)

It is the legal owner of a House Property who is chargeable to Tax in respect of Property Income.

• Thus there must be three conditions:

Condition. 1	the property should consist of any building or land appurtenant thereto
Condition 2	The assessee must be the owner of the property.
Condition 3	The property should not be used by the owner for the purpose of any business or profession Carried on by him.

Owner of House Property

• Owner can be legal or deemed
  
• Income from subletting is not chargeable under this head.

Deemed Ownership-(Sec27):

In the following cases for the purpose of computing income from House Property (sec-27) the persons are deemed owners of the House Property:

• An Individual, who transfers house property to his or her spouse (not being a transfer with an agreement or to his minor child (not being a married daughter) is treated as a deemed owner. The holder of an impartibly estate is called deemed owner.
• A member of a co-operative society, company or other association of persons, to whom a building part or leased under a house building scheme of the society, association of person or company, is treated as deemed owner.
• Or a person who comes to have control over the property in part performance of a contract.

Basis of computing income from

Let out house property:

Gross annual value Less : Municipal taxes ________________ Net annual value Less: Deduction under sec. 24 Standard deduction@ 30% Interest on borrowed capital _________________ Income from house property

Gross Annual value [sec. 23(1)]-

The gross annual value is determined as follows-

Step I	Find out reasonable expected rent
Step II	Find out rent actually received or receivable after excluding unrealized rent but before deducting loss
Step III	Find out which one is higher : I OR II
Step IV	Find out loss because of vacancy
Step V	III MINUS IV is gross annual value

Self occupied house property (Sec. 23 (2) (a)

A property will be considered SOP and above computation will be allowed if following conditions satisfied:

1. The property is not actually let out during whole or any part of the previous year.
2. No other benefit is derived there from.