Quick Summary
Income is taxable under the head 'house property' if it arises from a property of any building or land appurtenant thereto. For the computation of income under this head, a house property is classified into three categories: Let-out - Rented out to tenants. The actual rent received is taxable a
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FAQ :
Income from house property is taxable if it arises from a building or land appurtenant to it, provided you are the owner and the property is not used for your business or profession.
The GAV is the higher of the expected rent (which is the higher of municipal valuation or fair rent, capped by standard rent) or the rent actually received or receivable, after accounting for unrealised rent and vacancy losses.
For let-out properties, you can claim a mandatory standard deduction of 30% of the Net Annual Value, and actual interest paid on borrowed capital for acquisition, construction, or repairs.
For self-occupied properties, the Gross Annual Value is considered nil, meaning no rental income is taxable. However, interest on borrowed capital for acquisition or construction is deductible up to £2 lakhs, provided certain conditions are met.
Yes, properties used for agricultural purposes (farmhouses), business (trade premises), religious worship, or by foreign embassies are generally exempt. Properties under construction also have no income tax until completion.
Yes, if a property is co-owned, each owner can claim deductions separately, proportionate to their ownership share.
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