Income from House Property
Taxation on income from houses, buildings, and bungalows is outlined in Sec. 22 of the Income Tax Act, 1961. This includes determining the annual value based on various factors such as municipal rent value, fair rental value, and standard rent. The calculation of Gross Annual Value (GAV) and net income from house property involves deducting municipal taxes and applying relevant deductions under Section 24. It is essential for taxpayers to be aware of the key points regarding ownership, usage, and subletting of the property to ensure compliance with tax regulations.
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Presentation Transcript
Income from house property PRESENTED BY : PROF. RANJANA.D. MAHAJAN
INCOME FROM HOUSE PROPERTY Sec 22 of Income Tax Act 1961 Income from houses, buildings, bungalows Tax is based on Annual value.
POINTS TO BE REMEMBERED Assessee should be the Owner of the Property Should be not be used for Own Business or Profession In Case of Dispute Regarding Title Property Let Out along with other Assets In case of sub-Letting
ANNUAL VALUE (SEC 23) EXPECTED RENT Municipal Rent Value (MRV) Fair Rental Value (FRV) Whichever is higher (ER) Standard Rent (SR) ( If available) Whichever is less (ER) X X X X X X X X X ( If no SR) X X X X X X FAIR RENT The rent which a similar property will fetch at the same or nearby similar locality.
MUNICIPAL RENT The value fixed by the municipal or local authority STANDARD RENT Rent fixed by the Rent Control Act Max rent an owner can claim from his tenant as rent ACTUAL RENT Rent for which property has been let out
CALCULATION OF GAV Particular House 1 House 2 MRV 1,05,000 1,05,000 FRV 1,07,000 1,07,000 Whichever is higher 1,07,000 1,07,000 SR 1,35,000 1,35,000 ER (Whichever is Less) 1,07,000 1,07,000 AR 1,12,000 98,000 GAV 1,12,000 1,07,000
COMPUTION OF HOUSE PROPERTY INCOME Particulars amount amount Gross Annual Value xxx Less: Municipal tax -Paid by owner xxx Net Annual Value xxx Deduction U/S 24 1. Standard deduction -30% of NAV xxx 2. Int. on borrowed capital- Paid or due xxx xxx Income from House Property xxx
