What is Income from house property? Annual value how
determined? Section 22 and 23 of
Income Tax Act 1961
Income from house property and Annual value how
determined are defined under section 22 and 23 of Income Tax Act 1961.
Provisions under these sections are:
of Income Tax Act "Income from house property"
22. The annual value of property consisting of any
buildings or lands appurtenant thereto of which the assessee
is the owner, other than such portions of such property as
he may occupy for the purposes of any business or profession
carried on by him the profits of which are chargeable to
income-tax, shall be chargeable to income-tax under the head
"Income from house property".
of Income Tax Act "Annual value how determined"
23. (1) For the purposes of section 22, the annual value of
any property shall be deemed to be-
(a) the sum for which
the property might reasonably be expected to let from year
to year; or
(b) where the property or any part of the
property is let and the actual rent received or receivable
by the owner in respect thereof is in excess of the sum
referred to in clause (a), the amount so received or
(c) where the property or any part of the property
is let and was vacant during the whole or any part of the
previous year and owing to such vacancy the actual rent
received or receivable by the owner in respect thereof is
less than the sum referred to in clause (a), the amount so
received or receivable :
Provided that the taxes levied by
any local authority in respect of the property shall be
deducted (irrespective of the previous year in which the
liability to pay such taxes was incurred by the owner
according to the method of accounting regularly employed by
him) in determining the annual value of the property of that
previous year in which such taxes are actually paid by him.
Explanation.-For the purposes of clause (b) or clause (c) of
this sub-section, the amount of actual rent received or
receivable by the owner shall not include, subject to such
rules8 as may be made in this behalf, the amount of rent
which the owner cannot realise.
(2) Where the property
consists of a house or part of a house which-
(a) is in
the occupation of the owner for the purposes of his own
(b) cannot actually be occupied by the owner
by reason of the fact that owing to his employment, business
or profession carried on at any other place, he has to
reside at that other place in a building not belonging to
the annual value of such house or part of the house
shall be taken to be nil.
(3) The provisions of
sub-section (2) shall not apply if-
(a) the house or part
of the house is actually let during the whole or any part of
the previous year; or
(b) any other benefit therefrom is
derived by the owner.
(4) Where the property referred to
in sub-section (2) consists of more than one house-
the provisions of that sub-section shall apply only in
respect of one of such houses, which the assessee may, at
his option, specify in this behalf;
(b) the annual value
of the house or houses, other than the house in respect of
which the assessee has exercised an option under clause (a),
shall be determined under sub-section (1) as if such house
or houses had been let.