1. Income from House Property
Lecture Notes

2. Section 22: Basis of Charge
Income is taxable under the head “Income from House Property” if the following three conditions are satisfied:-
i) The property should consist of any building or land apparent thereto
ii) The assessee should be owner of the property
iii) The property should not be used by the owner for the purpose of any business or profession carried on by him, the profits of which are chargeable to income tax

3. Deemed Owner
Section 27 provides that following will be deemed owner of the house property for the purpose of charging tax on Annual Value.
i) Transfer to spouse or minor child
ii) Holder of impartible estate
iii) Property held by a member of Co-operative Society
iv) Person who has acquired a property under Power of
attorney transaction
v) Person who has acquired the Right in Property
u/s 269 UA (Property held on lease exceeding 12
years)

4. Annual Value A) Reasonable Expected Rent a) Municipal Valuation xx
b) Fair Rent xx
c) Standard Rent xx
(a) or (b) whichever is high XXX
subject to Maximum ( c)

5. Annual Value B) Rent Received/ Receivable
Rent for the period the property
is available for letting XX
Less : unrealised Rent XX
XXX

6. Annual Value C) : (A) or (B) whichever is high xxx
Less : Loss due to Vacancy XX
D) Gross Annual Value XXX

7. Net Annual Value Gross Annual Value XXX
Less : Municipal Taxes paid by owner XXX
Net Annual Value XXX
Less : Deduction u/s 24
i) Standard Deduction
( 30 % of Net Annual Value) XX
ii) Interest on Loan XX
Income from House Property XX

8. Self Occupied Property
Any one House Property occupied by the assessee for the purpose of residence is taken as SOP
Annual value of SOP is Nil
There is no deduction for SOP u/s 24 except interest on Housing Loan

9. Interest of Housing Loan for SOP
Interest is allowed upto a Maximum of the following limits for SOP :
For Loans on or after :
- For Purchase/ Construction : Rs 1,50,000
- For Repairs & Renewals : Rs 30,000
For Loans Prior to :
- For any purpose : Rs 30,000

10. Pre Construction Interest
Interest during the Construction period is accumulated and allowed as deduction in5 years
Pre Construction Period = Date of Loan
to 31st March immediately before Completion.
Interest = Loan X Period X Rate/100
Deduction = Total Interest / 5