Income
from House Property ( Sec. 22 to 27)
Sec. 22: Charging
section
Annual Value - Property (building/land appurtenant
thereto) – Assessee must be owner – Building not used for own
business/profession.
Sec. 23(1):
Annual Value defined
23(1)(a) The sum for which property might reasonably be expected
to let from year to year
Municipal Value (M.V) 12,000
or
Fair Rental Value (FRV) 14,000
Whichever is higher 14,000
The standard rent fixed 9,600
Gross Annual Value 9,600
or
23(1)(b) Where property or any part of the property
is let and the rent received/receivable is in excess of (a) by the owner in respect thereof is in excess of sum referred to
in clause (a),the amount so received or
receivable
Municipal Value (M.V) 12,000
or
Fair Rental Value (FRV) 14,000
Whichever is higher 14,000
The standard rent fixed 9,600
Restricted to standard rent 9,600
Actual rent received/re.
36,000
Gross Annual value 36,000
Less M.Taxes paid
during
the
previous year: 4,500
Annual Value: 31,500
or
23(1)(c) Where property or any part of the
property is let and was vacant during the whole any part of the previous year
and owing to such vacancy the actual rent received/receivable by the owner in
respect thereof is in less than sum referred to in clause (a),the amount so
received or receivable
Provided
(i)
Taxes levied and paid by the assessee shall be deducted irrespective to year to
which it relate
(ii)For the purposes of
clause (b) and (c) , the amount of rent, which the assessee could not realize, shall not be
included subject to rule 4 of I.T.Rules, 1962
23(2):
SELF OCCUPIED HOUSE: Where the Property consists of a house or part of
the house- occupied for self residence- annual value to be taken at Nil.. The house is in the occupation of the
assessee for the purposes of his own residence.
Or the house cannot be occupied due to employment, business or profession carried at any other place.
23(3) Conditions
to be fulfilled for 23(2)
(a): The house or part of the house is not let
for whole of part of the previous year;
or
(b): No
benefit is derived by the owner.
23(4) Where assessee has more than one self
occupied property .
(a) One
of the houses at the option of the owner to be taken as S.O.P
(b) The
annual value of the other houses will be computed as if let out
Sec. 24 : Deductions to be allowed
(a)
30% of Annual Value
(b)
Interest payable on sums borrowed for
acquisition, construction, repairs, renewal, reconstruction of property.
Note: (1) In case of property let out entire interest
will be allowed as deduction
(2) In
case of self occupied property the deduction of interest will be as under:
_________________________________________________________________
(a)
Where property is acquired
or constructed with capital
Borrowed before 01.04.1999 Rs. Not exceeding Rs. 30,000/-
__________________________________________________________________
(b) Where
property is acquired
Or constructed with capital
Borrowed on after 01.04.1999
Rs. Not exceeding Rs. 1,50,000/-
_________________________________________________________________
Note: Interest on capital borrowed for S.O.P is
to allowed if the loan is utilized for
acquisition or construction (only) of
the house property.
The
loan amount is to be utilized within three years from the end of the financial
year in which loan is taken.
The
assessee files a certificate from the person from whom loan is taken.
Interest
for pre-acquisition/pre consruction period.
Sec. 25: Deduction not to be allowed – interest
payable outside India on which on tax is paid in India or there is no agent in
India of the person to whom interest is paid
Special provisions
25-A: Unrealiszed
allowed as deduction, subsequently realized: where unrealized allowed
as deduction u/s 24(1)(x) prior to 01.04.2001 is realized subsequently, whether
or not, the assessee is owner of the
house property . No deduction u/s 23 and 24 is allowable.
25AA Unrealiszed
, subsequently realized:
unrealized rent for the period on or after
01.04.2001, received subsequently whether or
not, the assessee is owner of the house property. Deduction u/s 23 and 24 will be allowed.
25B: Arrears of rent: Receipt of arrears of rent is charged to tax under the head House
property ,whether or not, the assessee
is owner of the house property:
Deduction u/s 24(a) i.e 30% will be allowed.
Sec. 26 Property co-owned:
(i)
Where property is owned by more than one
person and their respective shares are not definite and ascertainable,
the income will be assessed in the hand of AOP/BOI.
(ii)
Where property is owned by more than one
person and their respective shares are definite and ascertainable, the
income will be assessed in the hand of each individual separately. Each and every co-owner is assessable in
respect of his share and eevery co-owner is entitled to deduction u/s 23 and
24.
Sec. 27 Deemed owner
(i)
Transfer to Spouse:
Property transferred by asseessee to Spouse without adequate consideration, not
being in connection with agreement to live apart.
(ii)
Transfer to a minor child:
Property transferred by assessee to minor child without adequate consideration
not being married daughter
(iii)
Holder of impartible estate:
Holder of impartible estate, shall bee deemed owner
(iv)
Member of Co-op. Society:Member
of Co-operative society, company, A.O.P/B.O.I in house building Scheme
(v)
Property purchased on POA: Property
acquired on power of attorney u/s 53A of Transfer of Property Act,
(vi)
Property
taken on lease:Where Property taken on lease for a period exceeding 12
years – u/s 269UA(f) of I.T.Act.
………
Such a very nice and informative post about Income from House Property. thanks for shearing with us.
ReplyDeletePlots for sale in Paragon City