INCOME FROM HOUSE

PROPERTY
Annual Value (Sec.23)
 Gross Annual Value
(a) Where Standard Rent has not been
fixed(Which ever is greater)
(i) Municipal Value
(ii) F.R.V.
(iii)Actual( De facto)rent
Example – M.V.= Rs. 50,000 FRV= Rs. 60,000
Actual Rent = Rs. 72,000
(b) Where Standard Rent has been fixed( Which
ever is less ) shall be the expected rent of the
building
(i) The value determined under (a), or
(ii) The standard rent fixed under the Rent
Control Act.
Example – M.V.= Rs. 50,000 FRV= Rs. 60,000
Actual Rent = Rs. 72,000, S.R= Rs. 80,000
 Chart showing computation of taxable income let out
or deemed to be let out.
Gross Annual Value of the house (Expected Rent) -----
Less: Local Taxes paid by the owner during the P.Y. ------
Less: Unrealised rent ------
_________________
Annual Value -----
Less: Deduction u/s 24:
(i) 30 % of Annual Value -----
(ii) Interest on loan, taken for purchase, construction,
or repair of the house, relating to the P.Y. -----
(iii) Interest on loan for the period prior to the P.Y. In
Which the house is completed is also allowable in 5
Equal annual instalments. -----
---------------------------------------------------------------------------------------------
Taxable Income from H.P. ------
• GAV - Rs. 66,000
• Municipal tax - Rs. 6,000
• P.Y. Interest on loan Rs. 20,000
Gross Annual Value of the house 66,000
Less: Local Taxes paid by the owner during the P.Y. 6,000

--------------------------------------------------------

Annual Value 60,000

Less: Deduction u/s 24:
(i) 30 % of Annual Value 18,000

(ii)Interest on loan, taken for purchase, construction,

or repair of the house, relating to the P.Y.
20,000
----------------------------------------------------------------------------------
-
Taxable Income from H.P.
Rs.22,000
 Self occupied house or Unoccupied house
• Where the property consist of a house or a
part of a house which:
(a)is in the occupation of the owner for the
purposes of his own residence; or
(b) house property meant for self residence but
could not occupied through out the P.Y. on
account of his service, business or profession
at any other palace.
The annual value of such house property shall
be taken as nil
• Point to note
(1)The self occupied house or part of it should not be let out
during the whole or any part of the P.Y.
(2)If a building consists of more than one floor/flat/unit and
more than one floor/flat/unit are self occupied, the annual
value of all such floors/flats/units shall be taken to be nil.
(3)If a building consists of more than one floor/flat/unit and a
floor/flat/unit is self occupied and other floors/flats/units
are let-out, the benefit of self occupancy shall be available
in relation to the floor/flat/unit which is self occupied.
(4)If the construction of the building is completed at any time
during P.Y. And afterwards self occupied ,it will be taken as
self-occupied for the whole P.Y.
• Deduction from the Annual value of self occupied house
-Interest on borrowed capital
(a)Where such property has been (i) acquired (ii)
constructed(iii) repaired (iv) renewed or (v) reconstructed
with capital barrowed on or before 31.03.1999, the
maximum limit for deduction of interest shall be Rs.
30,000.
(b)Where such property has been(i) repaired (ii) renewed or
(iii) reconstructed with capital barrowed on or after
31.03.1999, the maximum limit for deduction of interest
shall be Rs. 30,000.
(c)Where such property has been (i) acquired (ii)
constructed with capital barrowed on or
after31.03.1999, the maximum limit for deduction of
interest shall be Rs. 2,00,000.
 House use for self residence
Gross Annual Value NIL
Deduction:
(i)Interest on loan, taken for purchase,
construction, or repair of the house,
relating to the P.Y. -----
_______________________________________
More than two house property
- Two house for self residence would be exempt
from tax and other house considered deemed
to be let-out
• Difference between self occupied house and
let out house(deemed to be let out).