Income from House Property

Tax queries 800 views 4 replies

Nikhil Agrawal

Article trainee

52 Points Joined July 2009

Facts

An assessee stays in Mumbai (Bandra area) in a house provided by the company and does not pay any rent towards it. He works in Mumbai. However, a certain value of the house is included in the salary income of the assessee. The assessee does not claim any HRA.

The assessee has 3 flats in Mumbai (in Andheri area).

Our understanding

It is understood by me that it is not due to reasons of employment that the assessee is not able to occupy ie stay in any of his self owned houses. [Reference: section 23(2)]

Query

In light of the above facts can the assessee claim any of these 3 houses as “self occupied property” ?

Replies (4)

CA Rachit K Patel

Chartered Accountant

1503 Points Joined August 2008

Hi Nihkil,

As per your query, the discussion is as follows:

Section 23(2),23(3) & 23(4) :

(A) The annual value of a house or part of a house shall be taken to be "nil", if-

(1) it is in the occupation of the owner for the purpose of his residence:or

(2)it cannot actually be occupied by the owner due to his employment,business or profession carried on at any other place & he has to reside at that place in a building not belonging to him. (Section 23(2)).

(B) The annual vale of a house or part of a house, referred to in(A) above, shall not be taken to be "nil",if-

(1) the house or part of the house is actually let during the whole or any part of the previous yr; or

(2) the owner derives any other benefit from that house(Section23(3))

The annual value in respect of such house will be computed u/s 23(1).

In your case assessee can claim any one house of his choice as SOP. Other 2 houses will be considered as DLOP.

For better first calculate as if all the 3 house are DLOP,from those the house which has a max tax liability consider that as SOP & let the other houses be considered as DLOP.

Regards,

CA Rachit K Patel

CA CS Amit Borade

Chief Accountant

2828 Points Joined December 2007

Yes assessee can claim any of the property as SOP

Nikhil Agrawal

Article trainee

52 Points Joined July 2009

thanks rachit and amit.. but do u have any precedents or caselaws.. which is releveant to this and not section 54.. i have found some but they talk about its relevane to sec 54 and 54 F n i will have to derive logic out of that.. so if theres any precedent or case law with respect to my case particularly? thanks again Regards