• Shruti Sharma

Section 22 of the Income Tax Act, 1961- Income from house property.

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"Income from home property" refers to any income derived from a residential property, whether it comes from a rental income or a sale of the property. In essence, under the Income Tax Act, any property, including a house, a building, an office, or a warehouse, is considered "house property." One of the five heads of income considered in determining an assessee's gross total income (GTI) for the year is "Income from House Property."


The annual value of property owned by the assessee, including any buildings or lands attached to it, other than any portions he may occupy for the purposes of any business or profession he engages in and the profits of which are subject to income tax, shall be subject to income tax under the heading "Income from house property."


For income to be taxed as ‘Income from house property’ the following points should be noted carefully.


  • Building or Land Appurtenant thereto:- The scope of this head of income is limited to the income from buildings or lands appurtenant (attached or situated in the vicinity of building) to buildings only. Residential homes, bungalows, docks, warehouses, and other stone or brick constructions covered by roofs are all considered to be buildings. This clause does not apply to land that is not annexed to any buildings.


  • Annual value: The definition of "Annual value" is crucial since it is the building's or the land attached to it's annual worth that will be taxed, not the rent paid. The provisions of section 23 of the Income-tax Act must be followed in determining the annual value.


  • The property should be owned by the Assessee: Only the property's owner may be subject to taxation under this kind of income. The legal or beneficial owner, not the occupation or possession of the real estate, is subject to tax under this clause. As a result, subletting revenue will be deductible under the heading "Income from other sources" rather than "House Property." Therefore, only the owner, whether they are the actual or deemed owners, is subject to taxation under this head of income, unless he uses the residence as part of his own company or profession.

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