ITS TOO GOOD.....................
INCOME FROM HOUSE PROPERTY
COMPUTATION OF INCOME UNDER HOUSE PROPERTY
Gross Annual Value (GAV) ------
Less: Municipal Taxes (Paid by owner) -----
Less: Amount of Rent could not be realized -----
Net Annual Value (NAV) -----
Less: Section 24 Deduction
a. Standard Deduction (30% of NAV)
b. Interest on Loan on Borrowed Capital
-----
-----
Income chargeable for Tax under House Property -----
CACLULATION OF GROSS ANNUAL VALUE
Step -1
Municipal Rent Value Find out the Higer
between
Fair Rental Value
GROSS ANNUAL VALUE IN CASE OF VACANCY
Ø In Case of Vacancy Actual Rent is G.A.V
Step -3
Lower in Step-2
i.e
EXPECTED RENT
Find out the Higher
which is called
Gross Annual Value
Standard Rent As per
Rent control act
Step -2
Higher in step-1 Find out the lower
between which is
called
EXPECTED RENT
Standard Rent As per
Rent control act
* It is immaterial whether interest has been paid or not during p/y.
* Interest on interest and brokerage or commission paid for arrangement of loan is not
deductable.
* Ceiling of Rs 150000/Rs 30000 is not applicable on deemed let out property.
* If assessee let out his house to his employer, which in turn allots the same to him as rent
free accommodation, such house will not be treated as self-occupied for the above purpose,
because he is not occupied his own house in capacity of owner.
* Exp- loan was taken on 1-5-04 and construction was completed on 7-8-06, then a/y is 06-07
and p/y is 05-06. Accumulated interest would be from 1-5-04 to 31-3-06 means till last day of
p/y 05-06. 1/5 of such accumulated interest would be allowed for 5 successive f/y starting
from the year in which acquisition/construction was completed.
* Interest payable on fresh loans to repay the original loan is also deductable.
* Unrealized rent would be taxable on receipt, only if it was earlier allowed as deduction.
* A Resident “ A” is taxable under sec. 22 in respect of GAV of property in a foreign
Country BUT a Resident but not ordinarily Resident or a Non Resident is Chargeable u/s 22
in respect of HP in abroad provided if income is received in INDIA during the previous year
If There is Dispute on the Property then the current holder will be chargeable to tax
TREATMENT OF COMPOSITE PROPERTY
* When property is let out with other form of services (e.g. watchman, sweeper etc) -- Income
related to H.P is chargeable under H.P and income of other services is chargeable under other
sources.
* When property is let out with other assets such as AC, Car etc
* If other assets are inseparable from property (for e.g. AC) then whole amount would taxable
under PGBP
* If assets are separable from property (for e.g. car) then H.P income is chargeable under H.P
and other income is chargeable under PGBP/ Other Sources as the case may be.
Interest payable outside India will not be deductible if ………..
* Tax has not been paid or deducted from interest.
* There is no person in India who may be treated as an agent u/s 163 of the receipt for
such purpose.
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