FAQ'S on House Property Income

Last Updated On: July 24, 2020, 9:37 p.m.


1. What is the meaning of Income from House property?

Income from house property refers to the income generated from building be it as a flat, office, shop, etc. Income from house property is one of the five heads of income that is considered to calculate Gross Total Income.

2. What are the three conditions to be met under Income from House Property?

  • The house property should be a building, land or an apartment
  • The assessee should be the owner of the property, the house property should not be used for any business or professional purposes

3. The House property are classified into different types under Income Tax. What are they?

  • Self-Occupied Property which means the owner itself is considered to be in occupation of the property for his own residence,
  • Let Out Property (LOP) when the owner has let out his house property for the occupation of someone else and received the rent. In such a case, rental income is taxed.
  • Deemed Let Out Property (DLOP), in this case, the property is vacant but has got the potential to earn income and such potential income or the expected income (notional) is brought to tax.

4. How is the income from sub-letting be shown in I-T Return?
This income should be shown as the income from other sources and not as income from house property since the latter is applicable only in cases where you own the property and in case of sub-letting, the property is owned by someone else than you.

5. If I own the property and I have neither given the property on rent nor occupied for myself. It is vacant. I do not earn income from this property. How should it be declared in the I-T Return?

If you do not own any other property and are residing at other place because of your work, then this property may be treated as Self Occupied Property (SOP) and should be declared in I-T Return as such.

If you own any other property which has already been treated as Self Occupied Property (SOP), then this property shall be treated as vacant and Deemed Let Out Property (DLOP) and the notional income has to be computed.

6. What is Deemed-to-be-let property?

A property is considered to be let out when the owner passes on the right of its occupancy or usage to another person against a consideration. Irrespective of whether the other house(s) are vacant or occupied by the owner, and it will be considered as deemed to be let out.

7. What is meant by the gross annual value of the property?
Under the Income Tax, it is the amount that can be yielded from the property in a year as income, like rent, service charges, etc. This is the starting point for the computation of house property income. This base value is used to make relevant additions/subtractions and then to compute the actual net income from house property.

8. How is the Gross Annual Value determined?

  • Self-Occupied Property- the GAV is NIL or ‘0’
  • Let out property- two things are considered one rent amount received, two how much rent is calculated as per the municipal records, the higher of the two shall be the gross annual value.

9. In case, if a person has transferred his house property to his child who is minor and not married. In whose hands will the income from house property be taxed?
A minor is not responsible to pay tax. Therefore the beneficial owner of the house property, the income shall be taxed in your hands.

10. I have rented out a part of my house property and I stay in another part of the same house property. In such a case, how will the income be computed?
In this case, the two parts of the house shall be considered as independent house properties or taxable units.

The part in which you are staying shall be treated as a self-occupied property and the income shall be computed accordingly

The part which is given on rent shall be treated as let-out property and income shall be computed as income from let out property.


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