The document discusses income from house properties under the Indian Income Tax Act. It defines income from house properties as taxable if the property consists of a building or land, the taxpayer owns the property, and it is not used for business purposes. It provides details on computing income by determining gross annual value, deducting expenses like taxes and interest payments, and outlines special provisions for self-occupied properties and rental properties. The document also discusses topics like deemed ownership, treatment of vacant properties, co-owned properties, and the tax treatment of unrealized rent.
The document discusses the taxation of income from house property in India. It defines income from house property as notional income based on the annual rental value of a property, rather than actual rental income. It covers topics like classification of properties as self-occupied, let out, or deemed let out; computation of gross annual value; permitted deductions like standard deductions and interest on home loans; set-off of losses; and an example computation.
The document discusses income from house property under the Indian Income Tax Act. It defines key terms like house property, annual value, basis of charge, and ownership.
Some key points covered are:
- House property means any building owned by the assessee, including residential or commercial properties.
- The basis of charge is the annual value of the property, defined as the expected rental income.
- For a property to be counted as house property, it must consist of a building and land, and the assessee must own it and not use it for their own business.
- Deemed ownership provisions attribute ownership to certain relatives or in cases of transfer without adequate consideration.
- The annual value
This document discusses income from house property under section 22 of the Indian Income Tax Act. It defines annual value, deemed ownership, gross annual value, deductions allowed from house property income like interest on borrowed capital, and provides examples of practice sums to calculate income from house property.
The document discusses the taxation of income from house property under the Indian Income Tax Act. It covers the key concepts around deemed ownership, calculation of gross annual value, deductions allowed for municipal taxes and interest on borrowed capital, and the treatment of self-occupied properties. The document provides examples to illustrate how income from house property is computed for different ownership and occupancy scenarios.
Income From House Property New 2008 09 Assessment YearAugustin Bangalore
This document provides an overview of income from house property under the Indian Income Tax Act. Some key points covered include:
1. Income from house property is taxed based on the notional annual rental value of the property, whether rented or self-occupied.
2. For a property to be classified as a house property, it must have characteristics of a building and be owned by the assessee. Income from sub-let properties falls under 'income from other sources'.
3. Interest paid on loans for house property is deductible. Even if the net annual value is negative, interest paid can still be deducted.
The document discusses the taxation of income from house property in India. It defines income from house property as notional income based on the annual rental value of a property, rather than actual rental income. It covers topics like classification of properties as self-occupied, let out, or deemed let out; computation of gross annual value; permitted deductions like standard deductions and interest on home loans; set-off of losses; and an example computation.
The document discusses income from house property under the Indian Income Tax Act. It defines key terms like house property, annual value, basis of charge, and ownership.
Some key points covered are:
- House property means any building owned by the assessee, including residential or commercial properties.
- The basis of charge is the annual value of the property, defined as the expected rental income.
- For a property to be counted as house property, it must consist of a building and land, and the assessee must own it and not use it for their own business.
- Deemed ownership provisions attribute ownership to certain relatives or in cases of transfer without adequate consideration.
- The annual value
This document discusses income from house property under section 22 of the Indian Income Tax Act. It defines annual value, deemed ownership, gross annual value, deductions allowed from house property income like interest on borrowed capital, and provides examples of practice sums to calculate income from house property.
The document discusses the taxation of income from house property under the Indian Income Tax Act. It covers the key concepts around deemed ownership, calculation of gross annual value, deductions allowed for municipal taxes and interest on borrowed capital, and the treatment of self-occupied properties. The document provides examples to illustrate how income from house property is computed for different ownership and occupancy scenarios.
Income From House Property New 2008 09 Assessment YearAugustin Bangalore
This document provides an overview of income from house property under the Indian Income Tax Act. Some key points covered include:
1. Income from house property is taxed based on the notional annual rental value of the property, whether rented or self-occupied.
2. For a property to be classified as a house property, it must have characteristics of a building and be owned by the assessee. Income from sub-let properties falls under 'income from other sources'.
3. Interest paid on loans for house property is deductible. Even if the net annual value is negative, interest paid can still be deducted.
The document discusses income from house property under the Indian Income Tax Act. It defines income from house property as the annual value of any buildings or lands owned by an assessee. It provides details on computation of gross annual value, deductions allowed, treatment of self-occupied properties, and exempted incomes from house property. The key steps involved in computing income from house property are determining the annual value, calculating the net annual value, and claiming allowed deductions.
- Salaries received from employment are taxable under the head "income from salaries". This includes basic pay, bonuses, commissions, allowances, perks provided by the employer, and retirement benefits like pension and gratuity (subject to exemptions).
- Certain allowances and benefits are fully or partially tax exempt such as leave travel concession, medical reimbursements, rent free accommodation, interest free loans, etc. as per specified limits and conditions.
- The valuation and tax treatment of various types of non-monetary perquisites like cars, household employees, education, etc. is explained based on factors like employee category, location, and actual usage.
- Common deductions available from salary income include standard deduction,
The document discusses the taxation of income from house property under the Indian Income Tax Act. It provides definitions of key terms like annual value and outlines the process for computing taxable income from a house property. This involves determining the annual rental value, deducting municipal taxes paid, then allowing deductions like a 30% standard deduction and interest paid on loans taken for the property. The summary highlights the essential steps to calculate income from house property for tax purposes in India.
The document discusses key aspects of income from business and profession under the Income Tax Act in India. It defines business, profession, and vocation. It outlines essential features of a business like regular transactions, profit motive, use of labor and skill. It also discusses what constitutes a business under section 2(13) and explains concepts like trade, commerce, and manufacture. The document then covers important points about income from business like the business must be carried out by the assessee during the previous year, and income includes losses. It also discusses the cash and mercantile systems of accounting and conditions for claiming depreciation.
This document discusses income from capital gains in India. It defines capital gains as profits or gains from the sale of a capital asset, which can be movable or immovable property. For an asset to be considered a capital asset under tax law, it must be transferred and result in a profit. Capital assets are classified as short-term if held for 36 months or less, and long-term if held for over 36 months. Certain assets like listed shares have a shorter holding period of 12 months to be considered long-term. The document provides examples of capital assets and exceptions.
The document discusses key aspects of income from business and profession under the Income Tax Act of 1961 in India. It defines business and profession, outlines the basis of charge for income from business/profession, and describes various deductions that are allowed under sections 30-37 of the Act such as rent, repairs, insurance, depreciation, bad debts, and more. It provides explanations and conditions for claiming many of these deductions.
This document provides an overview of tax planning for individuals in India. It defines key terms related to taxes, including the meaning of tax, tax planning, and tax avoidance. It then outlines several strategies and considerations for tax planning under different types of income and assets. Specifically, it discusses opportunities for tax planning and exemptions related to agricultural income, income from a minor child, allowances from an employer, income from house property, business/profession income, capital gains, and other sources of income. The overall aim of the strategies presented is to help individuals legally minimize their tax liability.
This document provides an overview of income from house property under the Indian Income Tax Act. It defines income from house property as the annual value of any buildings or lands owned by the assessee. It discusses the conditions for a property to be taxed under this head, deductions allowed from annual value, ownership and deemed ownership, exempted property incomes, and special provisions for co-owned properties.
Our team has compiled the various sections applicable in Income Tax which are applicable to the Real Estate sector. Synopsis of the sections and a brief understanding is attached for your perusal.
Wealth tax is levied at 1% on net wealth exceeding Rs. 30 lakhs as of March 31. Net wealth is total assets minus exempted assets and debts incurred to purchase taxable assets. Individuals and HUFs resident in India are taxed on worldwide assets, while non-residents are taxed only on Indian assets. Common taxable assets include cars, boats, jewelry, urban land and cash in hand exceeding Rs. 50,000. One residential house and certain other assets are exempt from tax. Wealth tax returns are due by July 31 if not liable for audit, else by September 30, with late filing penalties of 1% per month. Wealth tax was abolished from FY 2016
Losses can be set off against income of the same year or carried forward to future years to offset income. Set off of losses occurs either intra-head, where losses of one source offset income of another source within the same head, or inter-head, where losses offset income across different heads. Strict rules govern which losses can offset which incomes both currently and when carried forward. House property losses can be carried forward 8 years against house property income, while long term capital losses can only offset long term capital gains.
The document summarizes various provisions related to the computation of income from business or profession under the Indian Income Tax Act. It discusses the meaning of business income and what types of incomes are chargeable under this head. It also outlines specific deductions allowed like rent, repairs, depreciation, scientific research, preliminary expenses, and more. It provides details on the calculation of profits, losses, treatment of unabsorbed depreciation and the methods of claiming depreciation.
This document outlines the different heads of income under which a person's taxable income is classified and assessed in India. The key heads of income are: salary, house property, profits from business/profession, capital gains, and other sources. It provides details on what constitutes income from each of these heads, such as the types of allowances and deductions included in salary income or the conditions for business/profession income to be taxed.
This document provides information about income from other sources under the Indian Income Tax Act, including:
- Income from other sources is the residual head of income for any income not covered under other heads.
- Section 56(2) lists specific incomes chargeable under this head, such as dividends, lottery winnings, interest, renting of machinery.
- Other incomes chargeable include various types of interest, director's fees, agricultural income from foreign land, and undisclosed income under sections 68-69C.
The document discusses provident funds in India, including statutory provident funds for government employees, recognized provident funds for large private organizations, unrecognized funds, and public provident funds. It notes that employer contributions are fully exempt for statutory and public funds. Employee contributions are deductible under section 80C for all funds. Interest is fully exempt for statutory, recognized up to 9.5%, and public funds, but taxable for unrecognized funds. At retirement, payouts are fully exempt for all except unrecognized funds, which are fully taxable. It also provides an example calculation for taxable recognized provident fund of an employee.
The document defines assessment year and previous year for income tax purposes.
Assessment year means the year following the financial year during which income is earned, specifically running from April 1 to March 31. Previous year refers to the financial year during which income is earned and is the year immediately preceding the assessment year. So the previous year is when income is generated, while the assessment year is when that income is assessed and taxed.
The Income Tax Act of India categorizes income into five different heads and income from house property is one of them. The rent that is received from any property is taxable under income from house property.
The document discusses income from house property under the Indian Income Tax Act. It defines income from house property as the annual value of any buildings or lands owned by an assessee. It provides details on computation of gross annual value, deductions allowed, treatment of self-occupied properties, and exempted incomes from house property. The key steps involved in computing income from house property are determining the annual value, calculating the net annual value, and claiming allowed deductions.
- Salaries received from employment are taxable under the head "income from salaries". This includes basic pay, bonuses, commissions, allowances, perks provided by the employer, and retirement benefits like pension and gratuity (subject to exemptions).
- Certain allowances and benefits are fully or partially tax exempt such as leave travel concession, medical reimbursements, rent free accommodation, interest free loans, etc. as per specified limits and conditions.
- The valuation and tax treatment of various types of non-monetary perquisites like cars, household employees, education, etc. is explained based on factors like employee category, location, and actual usage.
- Common deductions available from salary income include standard deduction,
The document discusses the taxation of income from house property under the Indian Income Tax Act. It provides definitions of key terms like annual value and outlines the process for computing taxable income from a house property. This involves determining the annual rental value, deducting municipal taxes paid, then allowing deductions like a 30% standard deduction and interest paid on loans taken for the property. The summary highlights the essential steps to calculate income from house property for tax purposes in India.
The document discusses key aspects of income from business and profession under the Income Tax Act in India. It defines business, profession, and vocation. It outlines essential features of a business like regular transactions, profit motive, use of labor and skill. It also discusses what constitutes a business under section 2(13) and explains concepts like trade, commerce, and manufacture. The document then covers important points about income from business like the business must be carried out by the assessee during the previous year, and income includes losses. It also discusses the cash and mercantile systems of accounting and conditions for claiming depreciation.
This document discusses income from capital gains in India. It defines capital gains as profits or gains from the sale of a capital asset, which can be movable or immovable property. For an asset to be considered a capital asset under tax law, it must be transferred and result in a profit. Capital assets are classified as short-term if held for 36 months or less, and long-term if held for over 36 months. Certain assets like listed shares have a shorter holding period of 12 months to be considered long-term. The document provides examples of capital assets and exceptions.
The document discusses key aspects of income from business and profession under the Income Tax Act of 1961 in India. It defines business and profession, outlines the basis of charge for income from business/profession, and describes various deductions that are allowed under sections 30-37 of the Act such as rent, repairs, insurance, depreciation, bad debts, and more. It provides explanations and conditions for claiming many of these deductions.
This document provides an overview of tax planning for individuals in India. It defines key terms related to taxes, including the meaning of tax, tax planning, and tax avoidance. It then outlines several strategies and considerations for tax planning under different types of income and assets. Specifically, it discusses opportunities for tax planning and exemptions related to agricultural income, income from a minor child, allowances from an employer, income from house property, business/profession income, capital gains, and other sources of income. The overall aim of the strategies presented is to help individuals legally minimize their tax liability.
This document provides an overview of income from house property under the Indian Income Tax Act. It defines income from house property as the annual value of any buildings or lands owned by the assessee. It discusses the conditions for a property to be taxed under this head, deductions allowed from annual value, ownership and deemed ownership, exempted property incomes, and special provisions for co-owned properties.
Our team has compiled the various sections applicable in Income Tax which are applicable to the Real Estate sector. Synopsis of the sections and a brief understanding is attached for your perusal.
Wealth tax is levied at 1% on net wealth exceeding Rs. 30 lakhs as of March 31. Net wealth is total assets minus exempted assets and debts incurred to purchase taxable assets. Individuals and HUFs resident in India are taxed on worldwide assets, while non-residents are taxed only on Indian assets. Common taxable assets include cars, boats, jewelry, urban land and cash in hand exceeding Rs. 50,000. One residential house and certain other assets are exempt from tax. Wealth tax returns are due by July 31 if not liable for audit, else by September 30, with late filing penalties of 1% per month. Wealth tax was abolished from FY 2016
Losses can be set off against income of the same year or carried forward to future years to offset income. Set off of losses occurs either intra-head, where losses of one source offset income of another source within the same head, or inter-head, where losses offset income across different heads. Strict rules govern which losses can offset which incomes both currently and when carried forward. House property losses can be carried forward 8 years against house property income, while long term capital losses can only offset long term capital gains.
The document summarizes various provisions related to the computation of income from business or profession under the Indian Income Tax Act. It discusses the meaning of business income and what types of incomes are chargeable under this head. It also outlines specific deductions allowed like rent, repairs, depreciation, scientific research, preliminary expenses, and more. It provides details on the calculation of profits, losses, treatment of unabsorbed depreciation and the methods of claiming depreciation.
This document outlines the different heads of income under which a person's taxable income is classified and assessed in India. The key heads of income are: salary, house property, profits from business/profession, capital gains, and other sources. It provides details on what constitutes income from each of these heads, such as the types of allowances and deductions included in salary income or the conditions for business/profession income to be taxed.
This document provides information about income from other sources under the Indian Income Tax Act, including:
- Income from other sources is the residual head of income for any income not covered under other heads.
- Section 56(2) lists specific incomes chargeable under this head, such as dividends, lottery winnings, interest, renting of machinery.
- Other incomes chargeable include various types of interest, director's fees, agricultural income from foreign land, and undisclosed income under sections 68-69C.
The document discusses provident funds in India, including statutory provident funds for government employees, recognized provident funds for large private organizations, unrecognized funds, and public provident funds. It notes that employer contributions are fully exempt for statutory and public funds. Employee contributions are deductible under section 80C for all funds. Interest is fully exempt for statutory, recognized up to 9.5%, and public funds, but taxable for unrecognized funds. At retirement, payouts are fully exempt for all except unrecognized funds, which are fully taxable. It also provides an example calculation for taxable recognized provident fund of an employee.
The document defines assessment year and previous year for income tax purposes.
Assessment year means the year following the financial year during which income is earned, specifically running from April 1 to March 31. Previous year refers to the financial year during which income is earned and is the year immediately preceding the assessment year. So the previous year is when income is generated, while the assessment year is when that income is assessed and taxed.
The Income Tax Act of India categorizes income into five different heads and income from house property is one of them. The rent that is received from any property is taxable under income from house property.
The document provides an overview of the Kurnool Municipal Corporation in India. It summarizes the corporation's history, governance structure, population details, civic amenities provided, and financial position. Key points include that Kurnool has a population of over 4.6 lakh people and the corporation provides various civic amenities like roads totaling over 450 km and drinking water supply to most areas for a few hours daily. The corporation's annual budget is over Rs. 159 crore with income generated from taxes, fees, and rents.
- Income from house property is taxed on a notional basis and includes any building with characteristic features of a building such as residential buildings or cinemas.
- For a property to be considered under the head house property, it must be owned by the assessee and not used for their own business or profession.
- The annual value of a property is its expected rental income and may be taken as actual rent received in some cases, with exceptions for vacant properties.
1. Income from house property is taxed under section 22 if the property is owned, consists of buildings or land, and is not used for business purposes.
2. Gross annual value is the standard to assess income and is the higher of expected rent and actual rent received less vacancy.
3. Deductions include municipal taxes paid, standard deduction of 30% of net annual value, and interest on borrowed capital. Income from self-occupied property allows deduction of interest up to Rs. 1.5 lakh.
The document discusses various aspects of income from business and profession under the Income Tax Act in India. It covers the charging section, meaning of business, income chargeable and not chargeable under this head, computation of business income, deductions allowed, depreciation, treatment of scientific research expenditure and more. Key points include that income from business includes profits from any profession, compensation for know-how, partner's salary, and export incentives. Deductions like rent, repairs, depreciation, and scientific research expenditure are allowed from business income.
This document provides an overview of the computation of income from house property under the Indian Income Tax Act. It defines key terms like annual value and outlines the steps to calculate gross annual value. It describes the deductions available for let out properties as well as the treatment of self-occupied properties. The document also discusses topics like deemed ownership, recovery of unrealized rent, and set-off and carry forward of losses from house property.
The document discusses various aspects of calculating income from house property for tax purposes in India. It explains that the annual value of a house, which is the inherent capacity of the property to earn income, is taxed. It provides details on how to compute the gross annual value, net annual value, and annual value by making deductions. Certain property incomes are exempt from tax. The determination of annual value is important for taxation of income from house property.
The document discusses the taxation of income from house property under the head "Income from House Property" in India. It defines key terms like total income, owner, deemed ownership. For a property to be taxed under this head, it must be owned by the assessee and not used for business purposes. The annual value is taxable, which is the expected reasonable rent. Standard deductions are available and interest on borrowed capital can be deducted. Unrealized rent is not taxed under certain conditions.
The document discusses key concepts related to income tax in India, including:
1. Income tax is levied on the income of individuals and companies by the government and is the major source of revenue.
2. For a company to be considered a resident in India for tax purposes, its control and management must be wholly situated in India. An Indian company is always considered a resident.
3. A company's tax liability depends on whether its income is considered Indian income or foreign income based on where the income is received/accrued. Indian income is always taxable in India for resident and non-resident companies.
The document discusses key concepts related to income tax in India, including:
1. Income tax is levied on the income of individuals and companies by the government and is the major source of revenue.
2. For a company to be considered a resident in India for tax purposes, its control and management must be wholly situated in India. An Indian company is always considered a resident.
3. A company's tax liability depends on whether its income is considered Indian income or foreign income based on where the income is received/accrued. Indian income is always taxable in India for resident and non-resident companies.
This document discusses income from house property under section 22 of the Income Tax Act. It covers topics such as:
1. The basis for charging income from house property including the conditions that the property must consist of buildings/lands, the assessee must own the property, and the property cannot be used for the assessee's own business.
2. Computation of income from let out and self-occupied house properties including determining annual value, allowable deductions, and the tax treatment of rental income.
3. Some exemptions to income from house property like income from farm houses and properties used for approved charitable purposes.
Objectives & Agenda :
One of the heads of income under the Income Tax Act is Income from House Property. Under this head, incomes earned from house properties are chargeable to tax. The webinar covers the aspects of basis of charging income to tax under this head, nature of house properties taxed under the Act, manner of computing income chargeable to tax under this head, deductions available under this head and eventually judicial precedents pertaining to this head of income.
The document discusses income from house property under the Indian Income Tax Act. It defines income from house property as the annual value of any buildings or lands owned by an assessee. There are different categories of house properties - let out, deemed let out, self-occupied, and vacant. The gross annual value is the expected rent, which is the higher of municipal value and fair rent subject to a maximum of standard rent. From the gross annual value, deductions can be claimed for taxes paid, standard deduction of 30% of net annual value, and interest on loans for self-occupied properties.
Income from House property explained in detail. One of these heads is “Income from House property”. The income earned by the ownership of a property is said to be Income from House property. If a taxpayer owns a house property and rents it, the rent received from that property is taxable. Your house, building, office, or shop can be termed as house property All types of properties are taxed under the head 'income from house property' in the income tax return.
The document discusses the taxation of income from house property under the Income Tax Act of 1961 in India. It covers topics such as the basis of charging income from house property, deemed ownership, exemptions, computation of annual value for let out and self-occupied properties, and deductions allowed such as municipal taxes and interest on borrowed capital. The key points are that income from house property is taxable unless used for business purposes; deemed owners include those who transfer property to their spouse or minor children; and deductions from annual value include standard deductions and interest expenses.
A property tax or millage rate is an ad valorem tax on the value of a property, usually levied on real estate. The tax is levied by the governing authority of the jurisdiction in which the property is located. This can be a national government, a federated state, a county or geographical region or a municipality.
income from house property full pdf for studychaitra742243
The document discusses the computation of income from house property under the Income Tax Act. Some key points:
1. Annual value of let out properties is the higher of expected rent (higher of municipal value and fair rent, capped at standard rent) and actual rent received/receivable.
2. For self-occupied properties, annual value is nil for up to two properties. For additional self-occupied properties, annual value is deemed to be expected rent.
3. For properties let out for part of the year and self-occupied for part, expected rent for the full year is considered. Municipal taxes paid can be deducted.
4. Properties held as stock can have nil annual value for 2
1) The document discusses income tax calculations related to house property in India. It covers topics like calculating income from self-occupied, let out, and inherited properties.
2) Homeowners can claim deductions on their income tax return for items like standard deduction, interest paid on home loans up to Rs. 2 lakh, principal repayments up to Rs. 1.5 lakh, and other charges related to home purchases.
3) There are different methods to calculate the rental value of a let out property for tax purposes, such as actual rent received, municipal rental value, fair rental value, and expected rental value.
1) The document discusses the computation of income from house property under the Indian Income Tax Act, including definitions of key terms, the basis for charging the income, methods for determining annual value and gross annual value, deductions allowed, and tax treatment of self-occupied properties.
2) It provides examples of how to calculate gross annual value and income from a let out property, and outlines the deductions available for interest on loans for self-occupied properties.
3) Losses from self-occupied properties can be set off against other income of the same assessment year.
house property, income from house property, let out property, vacant let out property, self occupied property, deemed let out property,
lop, vlop, sop, dlop, gross annual value, gav, reasonable letting value, rlv, municipal rateable value, mrv, starndard rent,
actual rent received, arr, municipal tax, deduction u/s 24, standard deduction, interest on loan, pre construction interest,
post construction interest, unrealised rent, arrears of rent, co-ownership, deemed owners, composite rent,
This document provides an overview of the key sections related to computing income from house property under the Indian Income Tax Act. It discusses sections 22-27 which relate to the chargeability and basis of taxing income from house property. It describes how to calculate the annual value of a property whether it is let out for the full year, partially let out and vacant, or self-occupied. It also covers deductions allowed for interest paid on loans for house property and treatment of unrealized rent. The document summarizes rules for co-owned properties and deemed ownership under section 27.
The document provides an overview of income tax treatment of income from house property in India. It defines what constitutes a house property and the conditions for income to be taxable under this head. Income from house property is calculated as gross annual value less municipal taxes and standard deduction of 30% of net annual value. For a let out property, gross annual value is the expected rent as per municipal valuation or fair rent, less vacancy losses. Deductions include interest on borrowed capital for acquisition or construction of the property. Up to two self-occupied properties can be treated as self-occupied, with the rest deemed let out.
The document discusses the taxation of income from house property under the Indian Income Tax Act of 1961. It defines income from house property as rental income earned from property. For a property to be taxed under this head, it must be owned by the assessee and not used for business purposes. The annual value of the property forms the basis of taxation and is determined in three steps - computation of gross annual value, net annual value, and final taxable income. Standard deductions like 30% of net annual value and interest paid on loans for purchasing/constructing the property within limits are allowed to arrive at the taxable income amount.
Method of Computation of Income from House PropertySundar B N
This document discusses the computation of income from house property under the Indian Income Tax Act. It defines income from house property as rental income or profits from selling a house, building, or other property. It explains that there are three types of house properties: self-occupied, let out, and deemed let out. Key terms related to house property income like municipal value, fair rental value, standard rent, and annual value are also defined. The document concludes by showing an example computation of taxable income from house property for an assessment year.
The document discusses the taxation of income from house property under the Income Tax Act.
1. Income from house property is taxable if the property is owned and is not used for business purposes. Various situations are discussed such as deemed ownership, self-occupied property, let out property, and vacant property.
2. In computing income from house property, gross annual value is determined based on municipal value, fair rent or actual rent whichever is higher. Standard deductions and interest on borrowed capital can be deducted to arrive at taxable income.
3. For self-occupied property, net annual value is nil and interest deduction is capped at Rs. 30,000/Rs. 2 lakh depending on the
This document provides details on preparing profit and loss accounts and balance sheets. It begins by defining key accounting concepts like revenue, expenses, net profit, and the difference between cash basis and accrual basis accounting. It then explains the purpose and preparation of key financial statements like the trading account, profit and loss account, and balance sheet. The trading account is used to calculate gross profit/loss, while the profit and loss account calculates net profit/loss. The balance sheet presents the financial position of a business on a given date by listing assets, liabilities, and capital. Accruals and deferrals are also discussed.
This document provides details on preparing profit and loss accounts and balance sheets. It begins by defining key accounting concepts like revenue, expenses, net profit, and the difference between cash basis and accrual basis accounting. It then explains the purpose and preparation of key financial statements like the trading account, profit and loss account, and balance sheet. The trading account is used to calculate gross profit/loss, while the profit and loss account calculates net profit/loss. The balance sheet presents the financial position of a business on a given date by listing assets, liabilities, and capital. Manufacturing accounts are also discussed for businesses that manufacture goods.
The document summarizes the tax treatment of income from salary in India. It defines salary and outlines what components are included as salary income. It states that salary income is taxable on a due or receipt basis, whichever is earlier. It provides details on the taxability of various salary allowances and perquisites. Key allowances like house rent allowance and travel allowance are partly exempt from tax up to certain limits. Most other allowances are fully taxable.
This document outlines the income tax rates in India from 1992-1993 to 2013-2014. It provides the tax rates for different income slabs for individuals, HUFs, AOPs and BOIs over these years. The tax rates varied from 0% to 50% depending on the income slab and year. Surcharge and education cess were also introduced in some years applicable above certain income thresholds.
1. Salary is remuneration received periodically for services rendered as a result of an employment contract. TDS or tax deducted at source is income tax deducted from salary payments.
2. To calculate TDS, the total gross salary is determined, exemptions are subtracted to get the taxable salary, and annual taxable income is projected. Deductions are then subtracted to get the total taxable income.
3. Based on the tax slabs, the annual tax liability is calculated. The monthly TDS amount is the annual tax divided by 12 months.
The document summarizes key aspects of the Wealth Tax Act of 1957 in India. It outlines that wealth tax is charged on the net wealth of individuals, HUFs, and companies above a certain threshold. It defines what constitutes an asset and exceptions. Some key assets include residential and commercial properties, motor vehicles, cash in hand, and jewelry. It also discusses deemed assets, asset valuation methods, tax rates, and filing of wealth tax returns.
This document summarizes key aspects of the Wealth Tax Act of 1957 in India, including:
- Who is required to file wealth tax returns and by what deadline.
- The types of assets that are included in calculating net wealth and subject to the 1% wealth tax, such as residential/commercial property, jewelry, vehicles, and cash over a certain amount.
- Exceptions and exemptions to assets included in net wealth, such as one residential property or assets held in trust.
- How different types of assets are valued for wealth tax purposes, such as through capitalizing rental income for property or independent appraisals for jewelry.
The document outlines various time limits for income tax assessments and related procedures in India. It discusses that intimal notices under section 143(1) must be sent within one year of the end of the financial year in which the return was filed. Regular assessments under section 143 must be completed within two years of the end of the relevant assessment year. If a case is referred to a transfer pricing officer, the time limit is extended by 12 months. Notice for reassessment under section 147 must generally be issued within four years, but can be issued within six years in some cases.
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1. All about Income from
House Properties
By
Shankar Bose
Inspector of Income Tax
O/o the Principal Chief Commissioner of
Income Tax, Odisha Region, Bhubaneswar
2. All about Income from House Properties
1 Basis of Charge [Section 22]:
Income from house property shall be taxable
under this head if following conditions are
satisfied:
a) The house property should consist of any
building or land appurtenant thereto;
b) The taxpayer should be the owner of the
property;
c) The house property should not be used for the
purpose of business or profession carried on by
the taxpayer.
3. 2 Computation of income from house property:
Income from a house property shall be determined in the
following manner:
Particulars Amount
Gross Annual Value -
Less: Municipal Taxes -
Net Annual Value ****
Less: Standard deduction at 30%
-
[Section 24(a)]
Less: Interest on borrowed capital
[Section 24(b)]
-
Income from house property ****
4. 3 Gross Annual value [Sec. 23(1)]
The Gross Annual Value of the house property shall be
higher of following:
a) Expected rent, i.e., the sum for which the property
might reasonably be expected to be let out from year to
year. Expected rent shall be higher of municipal
valuation or fair rent of the property, subject to maximum
of standard rent;
b) Rent actually received or receivable after excluding
unrealized rent but before deducting loss due to vacancy
Out of sum computed above, any loss incurred due to
vacancy in the house property shall be deducted and
the remaining sum so computed shall be deemed to
the gross annual value.
5. 4 Deductions:
Description Nature of Deductions
Municipal Taxes Municipal taxes including
service-taxes levied by any local
authority in respect of house
property is allowed as deduction,
if:
a) Taxes are borne by the owner;
and
b) Taxes are actually paid by him
during the year.
Standard Deduction[Section
24(a)]
30% of net annual value of the
house property is allowed as
deduction if property is let-out
during the previous year.
6. Interest on Borrowed Capital *
[Section 24(b)]
a) In respect of let-out property, actual interest
incurred on capital borrowed for the purpose of
acquisition, construction, repairing, re-construction
shall be allowed as deduction
b) In respect of self-occupied residential house
property, interest incurred on capital borrowed
for the purpose of acquisition or construction of
house property shall be allowed as deduction up
to Rs. 2 lakhs. The deduction shall be allowed if
capital is borrowed on or after 01-04-1999 and
acquisition or construction of house property is
completed within 3 years.
c) In respect of self-occupied residential house
property, interest incurred on capital borrowed
for the purpose of reconstruction, repairs or
renewals of a house property shall be allowed as
deduction up to Rs. 30,000.
* Any interest pertaining to the period prior to the year of acquisition/
construction of the house property shall be allowed as deduction in five equal
installments, beginning with the year in which the property was acquired/
constructed.
7. * Deduction for interest on borrowed capital shall
be limited to Rs. 30,000 in following
circumstances:
a) If capital is borrowed before 01-04-1999 for
the purpose of purchase or construction of a
house property;
b) If capital is borrowed on or after 01-04-1999 for
the purpose of re-construction, repairs or
renewals of a house property;
c) If capital is borrowed on or after 01-04-1999
but construction of house property is not
completed within three years from end of the
previous year in which capital was borrowed.
8. 4.1 Deduction for interest on housing loan [Section 80EE]:
One time deduction of up to Rs. 1 Lakh shall be allowed to an individual for the
interest incurred on loan taken for residential house property subject to the
following conditions:
a) Loan is sanctioned during the financial year 2013-14, i.e., between 01-04-
2013 to 31-03-2014;
b) Loan is taken from a financial institution (a bank or house finance company);
c) Amount of loan sanctioned for acquisition of house property does not exceed
Rs. 25 Lakhs;
d) The value of residential house property does not exceed Rs. 40 Lakhs; and
e) The assessee does not own any residential house property on the date of
sanction of loan.
If interest payable during the previous year 2013-14 is less than Rs. 1 lakh, the
balance amount shall be allowed as deduction in the next previous year 2014-
15. Interest which is allowed as deduction under this provision shall not be
allowed as deduction under any other provisions of the Act.
9. S. No. Property
Type
Gross
Annual
Value of
the
property
Deduction
for
municipal
taxes
Net
Annual
Value of
the
property
Standard
Deduction
Interest on
borrowed
capital
1. One self-occupied
house
property
Nil Nil Nil Nil Deduction
for interest
on
borrowed
capital is
allowed up
to Rs.
30,000 or
Rs.
2,00,000,
as the case
may be.
5 Computation of Income from House Property
10. 2. House
property
could not
be
occupied
by the
owner
due to
employm
ent or
business
carried
on at any
other
place
Nil Nil Nil Nil Deductio
n for
interest
on
borrowed
capital is
allowed
up to Rs.
30,000 or
Rs.
2,00,000,
as the
case may
be.
11. 3. Let out
property
To be
computed
as per
provisions
of Section
23(1)
Allowed on
actual
payment
basis
Gross
annual
value less
Municipal
taxes
30% of Net
Annual
Value
Entire amount of
interest paid or
payable on
borrowed capital
shall be allowed
as deduction. Pre-construction
interest shall be
allowed as
deduction in 5
annual equal
installments
(Subject to
certain
conditions).
12. 4. More than one-self occupied
property
Only one property selected by
the taxpayer will be
considered as self-occupied
house property and all other
properties shall be deemed to
be let-out for the purpose of
computation of income under
the head house property.
5. A self-occupied property let-out
for the part of the year
The house will be taken as let-out
property and no
concession shall be available
for the duration during which
the property was self-occupied.
6. One part of the property is let-out
and other part is used for
self-occupied purposes
Each part of the property shall
be considered as separate
property and income will be
computed accordingly
13. 6 Composite Rent:
If letting out of building along with movable assets i.e.,
machinery, plan, furniture or fixtures, etc. forms part of a
single transaction and are inseparable, the composite
rent shall be taxable under the head “Profits and gains
from business or profession” or “Income from other
sources”, as the case may be. On the other hand, if the
letting out of building is separable from letting of other
assets, then income from letting out of building shall be
taxable under the head “Income from house property”
and income from letting out of other assets shall be
taxable under the head “Profits and gains from business
or profession” or “Income from other sources”, as the
case may be.
14. 7 Treatment of unrealized rent and arrears of rent
[Explanation to section 23(1)]
7.1 Deduction for unrealized rent:
Unrealized rent is that portion of rental income which the owner
could not realize from the tenant. Unrealized rent is allowed to be
deducted from actual rent received or receivable only if the
following conditions are satisfied:
a) The tenancy is bona fide;
b) The defaulting tenant has vacated, or steps have been taken to
compel him to vacate the property;
c) The defaulting tenant is not in occupation of any other property
of the assessee;
d) The taxpayer has taken all reasonable steps to institute legal
proceedings for the recovery of the unpaid rent or satisfies the
Assessing Officer that legal proceedings would be useless.
15. 7.2 Subsequent recovery of unrealized rent
[section 25AA]
Any subsequent recovery of unrealized rent shall
be deemed to be the income of taxpayer under
the head “Income from house property” in the
year in which such rent is realized (whether or not
the assessee is the owner of that property in that
year).
7.3 Arrears of rent [Section 25B]
Any amount received by taxpayer in respect of
arrears of rent from a property shall be
chargeable to tax under the head income from
house property in the year of receipt after
deducting a sum equal to 30% of such amount.
16. 8 Co-owner and Deemed Owner
8.1 Property owned by co-owners [Section 26]:
If house property is owned by co-owners and their share
in house property is definite and ascertainable than the
income of such house property will be assessed in the
hands of each co-owner separately. For the purpose of
computing income from house property, the annual
value of the property will be taken in proportion to their
share in the property. In such a case, each co-owner
shall be entitled to claim benefit of self-occupied house
property in respect of their share in the property (subject
to prescribed conditions). However, where the shares of
co-owners are not definite, the income of the property
shall be assessed as that of an Association of persons.
17. 8.2 Deemed owner [Section 27]:
Income from house property is taxable in the hands of its
owner. However, in the following cases, legal owner is
not considered as the real owner of the property and
someone else is considered as the deemed owner of the
property to pay tax on income earned from such house
property:
1. An individual, who transfers otherwise than for
adequate consideration any house property to his or her
spouse, not being a transfer in connection with an
agreement to live apart, or to a minor child not being a
married daughter, shall be deemed to be the owner of
the house property so transferred;
2. The holder of an impartible estate shall be deemed to
be the individual owner of all the properties comprised in
the estate;
18. 3. A member of a co-operative society, company or other
association of persons to whom a building or part thereof is
allotted or leased under a house building scheme shall be
deemed to be the owner of that building or part thereof;
4. A person who is allowed to take or retain possession of any
building or part thereof in part performance of a contract of the
nature referred to in Section 53A of the Transfer of Property Act,
1882 shall be deemed to be the owner of that building or part
thereof;
5. A person who acquires any rights (excluding any rights by way
of a lease from month to month or for a period not exceeding one
year) in or with respect to any building or part thereof, by virtue of
any such transaction as is referred to in section 269UA(f), shall be
deemed to be the owner of that building or part thereof.
THANKS