INCOME FROM HOUSE PROPERTY

• Basic Conditions– There should be a House Property

– Should be owned by the assessee

– Should not be used for the business of the assessee, the income from which is taxable

HOUSE PROPERTY

• Meaning– Building

And / or Land attached to or connected

to the building • Commercial as well as Residential

OWNERSHIP

• Actual

• Deemed – Transfer by Husband to wife without

adequate consideration (except to leave apart)

– Part performance of an agreement

TYPES OF H.P• FLOP

• PLOP

• VLOP

• DLOP

• SOP/UOP

CALCULATION OF INCOME

• GAV– LESS MUNICIPAL TAX

• NAV– LESS DEDUCTION U/S. 24– ADD ADDITION U/S. 25

G.A.V

• FLOP/ PLOP/DLOP• R.L.V

– FAIR RENT– MUNCIPAL

VALUTION– STANDARD

RENT• ACTUAL RENT

• S.O.P/ U. O. P– Nil

• VLOP– If A.R lower than

R.L.V. due to Vacancy

EXAMPLE FOR RLV

• FAIR RENT

– OR• MUNCIPAL VALUTION

• WHICH EVER IS

• HIGHER

SECTION 24

• Standard Deduction– 30% of G.A.V.

• Interest on Loan borrowed for the H.P.– Pre-construction

– Post-construction

EXAMPLE FOR PRE-CONSTRUCTION

INTEREST• Loan taken on 1st April 2000

Rs.10,00,000 @ 12%• Construction completed on 2nd July

2002• Pre construction period=1/4/2000 to

31/3/2002• Pre construction interest = 2,40,000• Deduction over next five years

starting from 1/4/2002 to 31/3/2007 (20% each year) in addition of the annual interest

EXAMPLE FOR POST-CONSTRUCTION

INTEREST• FLOP/PLOP/VLOP/

DLOP– Loan taken for

construction/ purchase of the property

– No Limit

• SOP/ UOP– Loan taken for

construction/purchase of the property

– Rs.1,50,000 (Loan taken after 1-4.99)

– Rs.30000 (For prior period)

– Limit incl. repair loan repayment

SECTION 25

• Unrealized Rent

• Arrears of Rent