FAQ's

  1. Is rental income from sub-letting chargeable to tax under the head “Income from house property”?

    No.Rental income received by a tenant from sub-letting is taxable under the head “Income from other sources” or profits and gains from business or profession.

  2. Under which head is the rental income from a shop charged to tax?

    The rental income from a shop will be charged to tax under the head “Income from house property”.

  3. What is composite rent?

    Composite rent means the rent of building and rent towards other assets or facilities. It is the rent charged in cases where the person does not merely let out a property, but also provides other facilities.

  4. What is Municipal Value?

    Municipal Value is the value determined by the municipal authorities by making a periodical survey of all buildings in their jurisdiction

  5. What do you mean by Fair Rent?

    It is the reasonable expected rent which the property can fetch

  6. What is Standard Rent?

    It is the maximum rent which a person can legally recover from his tenant.

  7. How to compute reasonable expected rent of a property which is let-out throughout the year?

    Municipal value or Fair rental value whichever is higher is taken as the expected rent, but it should not be more than the standard rent.

  8. What is Actual Rent?

    Actual rent means the rent for which the property is let out during the year.

  9. How to compute actual rent of a property which is let-out throughout the year?

    While computing actual rent, rent pertaining to vacancy period is not to be deducted. However, unrealised rent is to be deducted from actual rent.

  10. What do you mean by Unrealised Rent?

    Unrealised rent is the rent of the property which the owner of the property could not recover from the tenant, i.e., rent not paid by the tenant.

  11. How to compute the gross annual value of a property which is vacant for some time during the year?

    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 reasonable expected rent than the actual rent so received or receivable (as reduced by the vacant allowance) shall be considered to be the Gross Annual Value of the property.

  12. What are the expenses to be deducted from gross annual value for computing Income from house property?

    The expenses to be deducted includes Municipal tax paid, Standard deduction @ 30% of Net Annual Value and Interest on capital borrowed for the purpose of purchase, construction, repair, renewal or reconstruction of the property.

  13. How much interest on housing loan of a let-out property can be claimed as deduction under the head Income from house property?

    There is no limit on the quantum of interest which can be claimed as deduction under the head Income from house property.

  14. What is pre-construction period?

    Pre-construction period is the period commencing from the date of borrowing of loan until the completion of the construction or acquisition of the property.

  15. What is post-construction period interest?

    It is the interest pertaining to the relevant year, i.e., the year for which the income is being computed

  16. Can I claim pre-construction interest as deduction?

    Yes, interest pertaining to pre-construction period is allowed as deduction in five equal instalments commencing from the year in which the house property is acquired or constructed.

  17. Can the rental income received be split and taxed in the individual hands?

    Can the rental income received be split and taxed in the individual hands?

  18. What is self-occupied property?

    A self-occupied property means a property which is occupied throughout the year by the owner for his residence

  19. Can a property not used for residence by the owner be treated as self-occupied property?

    No. However, there is one exception to this rule.

  20. What income is charged to tax under the head “Income from house property”?

    Rental income from a property being building or land appurtenant thereto of which the taxpayer is owner is charged to tax under the head “Income from house property”. 

  21. What will be the tax implications if a person occupies more than one property for his residence?

    If a person occupies more than one property for his residence, then the self-occupied benefit will be granted only in respect of any one property as selected by him and other property/properties will be treated as “Deemed to be let-out”. However, w.e.f. A.Y 2020-21 a person can claim two properties as self-occupied house property.

  22. What will be the tax implications if a person occupies more than two properties?

    A person can claim two house properties as self-occupied w.e.f. A.Y 2020-21. Any two of them shall be treated as self-occupied and the remaining as deemed let-out and will be taxed accordingly.

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