INCOME FROM HOUSE PROPERTY Basic ConditionsBasic 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 MeaningMeaning –Building And / or Land attached to or connected to the building Commercial as well as ResidentialCommercial as well as Residential

OWNERSHIP ActualActual DeemedDeemed –Transfer by Husband to wife without adequate consideration (except to leave apart) –Part performance of an agreement

TYPES OF H.P FLOPFLOP PLOPPLOP VLOPVLOP DLOPDLOP SOP/UOPSOP/UOP

CALCULATION OF INCOME GAVGAV –LESS MUNICIPAL TAX NAVNAV –LESS DEDUCTION U/S. 24 –ADD ADDITION U/S. 25

G.A.V FLOP/ PLOP/DLOPFLOP/ PLOP/DLOP R.L.VR.L.V –FAIR RENT –MUNCIPAL VALUTION –STANDARD RENT ACTUAL RENTACTUAL RENT S.O.P/ U. O. P –Nil VLOP –If A.R lower than R.L.V. due to Vacancy

EXAMPLE FOR RLV FAIR RENTFAIR RENT –OR MUNCIPAL VALUTIONMUNCIPAL VALUTION WHICH EVER ISWHICH EVER IS HIGHERHIGHER

SECTION 24 Standard DeductionStandard Deduction –30% of G.A.V. Interest on Loan borrowed for the H.P.Interest on Loan borrowed for the H.P. –Pre-construction –Post-construction

EXAMPLE FOR PRE-CONSTRUCTION INTEREST Loan taken on 1 st April %Loan taken on 1 st April % Construction completed on 2 nd July 2002Construction completed on 2 nd July 2002 Pre construction period=1/4/2000 to 31/3/2002Pre construction period=1/4/2000 to 31/3/2002 Pre construction interest = 2,40,000Pre 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 interestDeduction 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/ DLOPFLOP/PLOP/VLOP/ DLOP –Loan taken for construction/ purchase of the property –No Limit SOP/ UOP –Loan taken for construction/purchas e of the property –Rs.1,50,000 (Loan taken after ) –Rs (For prior period) –Limit incl. repair loan repayment

SECTION 25 Unrealized RentUnrealized Rent Arrears of RentArrears of Rent