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Income from House Property doubt

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Aditya Bajaj

1 Points Posted on 30 August 2022

why taxable value is calculate on Expected rent since it is not actually earned by assessee and also taken Expected rent and actual rent receivable whichever is more supppose actual rent receivable is only 100000 and expected rent is 200000 in this case assessee is not earning 200000 but tax will be conclude on this

Replies (3)

Quick Summary

This discussion clarifies how income from house property is taxed, specifically addressing why tax is calculated on expected rent even if it's not fully realised. The rule is that the taxable value is based on the higher of the expected rent or the actual rent receivable. This prevents income suppression. The discussion also notes that rent not received due to vacancy in a financial year is not subject to tax.

Eswar Reddy S

CFO- at NHTF

58280 Points Posted on 31 August 2022

Adjust in loss due to vacancy or unrealised rent

Shiva Durg

52 Points Posted on 31 August 2022

A house in the same locality would fetch a rent higher (expected rent) than what the assessee has declared ( actual rent) . A prudent man wouldn't receive rent lower when a higher one can be received. If it happens so, it might be because assessee is suppressing his income by way of not being prudent. To avoid this, the taxable value ( gross annual value) is expected rent or actual rent whichever is higher