Tag: Income from House Property

Income under the head house property

Tax on Income from House Property is the tax on income earned from rent by letting out house property on rent. Income from House Property is charged to tax on a notional basis. Income under the head house Property also include Income from letting out of Commercial Properties and all types of properties. Note:Property for …

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Conditions for the admissibilty of Interest on Loan taken for Self-Occupied Property

1. Loan taken for acquisition or construction of house property on or after 01.04.99 and the same was completed within 3 years from the end of the financial year in which capital was borrowed, interest paid or payable,subject to a maximum of ` 1,50,000 (= Current year + 1/5th of prior-period interest) 2. Loan taken …

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Computation of Income from House Property

PROPERTY USED FOR ANNUAL VALUE Deductions Allowed Section 1. Self occupied House Property or self occupied property kept vacant Nil u/s 24(b), subject to the fulfillment of conditions 23(2) 2. Property let out for the whole year To be computed All deductions 23(1)(a)/(b) 3. Let out property kept vacant for the whole year Nil All …

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Computation of Prior Period Interest

Let us illustrate the steps with an example : Loan taken on 1.7.08 ` 8,0,000 @ 9% p.a. Date of completion of construction 31.5.11. Loan amount remains outstanding till date. Determine Prior Preiod and Interest u/s 24(b) Step 1: Identify the Date of Borrowal of Loan                                       1.7.08 (P.Y : 08-09) Step 2: Identify the Date …

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Deduction from Net Annual Value

A. Standard Deduction u/s 24(a) Standard deduction of 30% of NAV (Net Annual Value) shall be allowed to the assessee. B. Interest on Loan u/s 24(b) 1. Purpose of loan: The loan shall be borrowed for the purpose of acquisition, construction, repairs, renewal or reconstruction of the house property. 2. Accrual basis: The interest will …

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Municipal Tax

1. Municipal Tax includes services tax like Water Tax and Sewerage Tax levied by any local authority. It can be claimed as a deduction from the Gross Annual Value of the Property. 2. Conditions: (a) Paid by Owner. The tax shall be borne by the owner and tie same was paid by him during the …

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Unrealized Rent

Unrealized Rent means the rent not paid by the tenant to the owner and the same shall be deducted from the Actual Rent Receivable from the property before computing income from that property, provided the following conditions are satisfied : 1. The tenancy is bonafide 2. The defaulting tenant should have vacated the property 3. …

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Receipt of Arrears of Rent

1. Meaning: Arrears of Rent means the incremental rent relating to earlier financial years which has not been offered to tax in those financial years itself, but received during the current financial year, 2. Chargeability: Receipt of Arrears of Rent will be chargeable to tax under the head Income from House Property only. 3. Year …

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RECOVERY OF UNREALISED RENT

1. Chargeability: Recovery of Unrealized Rent is chargeable to tax as “Income from House Property”. 2. Year of Taxability: Unrealized Rent recovered is taxable in the financial year in which it is recovered. 3. Non-Subsistence of Ownership: It will be taxable in the hands of Individual even if he does not own the property to …

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Property Income is Exempt from Tax to Certain Persons

10(19A):       An Ex-Ruler for his occupation (palace) 10(20):          Local Authority. 10(21):          Approved Scientific Research Association. 10(23B):       Institution for the development of Khadi and Village Industries. 10(23BB):    Khadi and Village Industries Boards. 10(23BBA): A body or authority for administering religious or charitable Trust or endowments. 10(23C):      Certain Funds, educational institutions, hospitals etc. 10(24):         Registered Trade Union. …

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