Question: What Is Income From House Property?

What is the meaning of income from house property?

Income from House Property in India: The income arising out of a house property either in the form of a rental income or on its transfer is referred to as ‘ income from house property ‘. In essence, any property such as house, building, office, warehouse is treated as ‘ house property ‘ under the Income Tax Act.

How do you calculate income from house property?

Steps to compute “ Income from House Property ”

  1. a. Determining Gross Annual Value (GAV) of the property:
  2. b. Reduction of Municipal Taxes( property tax):
  3. c. Determination of Net Annual Value (NAV):
  4. d. Reduction of standard Deduction @30% of Net Annual Value:
  5. e. Reduction of home loan interest:
  6. f.
  7. g.

What are the income exempted from income from house property?

House property income of a political party is free from tax under Section 13A. Revenue earned from a property belonging to an approved scientific research association is exempted from tax under Section 10(21). Property income of educational organizations, medical institutions are free from tax as per Section 10(23C).

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What do you mean by house property?

House property as per the Income-tax Act, 1961 means any building (or land adjacent to such building) owned by assessee himself. House property includes flats, shops, office space, factory sheds, commercial building, agricultural land and farm houses etc.

Which income is not treated as casual income?

Apart from these, any incomes which are unanticipated and non -recurring in nature are called Casual incomes. Similarly, capital gains, receipt from a business or an occupation and one-time benefits like bonus given to employees are not casual incomes.

How much rent income is tax free?

When the Rent Amount Exceeds Rs 1 Lakh In case the rent paid towards house rent is more than Rs 1 Lakh, the individual can claim HRA tax exemptions towards it. He or she will have to furnish the PAN details of the property owner, along with the rent receipts.

Is rent from property taxable?

According to the Income Tax Act, rental income of a property is taxed under Section 24 in the hands of the owner, under the head ‘income from house property ‘. Please note that the rental income becomes taxable in your hand on accrual basis and not on receipt basis. It is only the owner, who is taxed for rent received.

How many houses can be treated as self occupied?

The choice of which property to choose as self – occupied is up to the taxpayer. For the FY 2019-20 and onwards, the benefit of considering the houses as self – occupied has been extended to 2 houses. Now, a homeowner can claim his 2 properties as self – occupied and remaining house as let out for Income tax purposes.

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When an income is chargeable under the head income from house property?

While computing income chargeable to tax under the head “ Income from house property ” in case of a let-out property, the taxpayer can claim deduction under section 24(b) on account of interest on loan taken for the purpose of purchase, construction, repair, renewal or reconstruction of the property.

What is annual value of a house property?

Annual Value of a home is the sum for which the property might reasonably be expected to be let out from year to year. So it is the notional rent which could be got if the property were to be rented. It is the inherent capacity of the property to earn income.

Which income is exempted from tax?

Tax Free / Exempt Income Under Income Tax Act, 1961

Allowances Exemption Limit
Children Education Allowance Up to Rs. 100 per month per child up to a maximum of 2 children is exempt
Hostel Expenditure Allowance Up to Rs. 300 per month per child up to a maximum of 2 children is exempt


What are the types of house property?

As per the Income Tax Act, 1961, a house property included building, flats, office space, shops, factory sheds, commercial building or agricultural lands. House property are of three types:

  • Self-occupied property.
  • Let out property and.
  • Deemed to be let out property.

What is self occupied house?

Self occupied house property: This means property which is used by assessee or his family for their own residence. As per the Income-tax Act, if assessee owns more than 1 self occupied properties, only one of them can be claimed as Self occupied property.

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What is mean by let out property?

A property is considered to be let out when the owner passes on the right of its occupancy or usage to another person against a consideration (rent). Irrespective of whether the other house (s) are vacant or occupied by the owner, they will all be deemed to be let out.

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