Income From House Property

The rent received from any house property is taxable as Income from House Property and some specific deductions are also allowed from such income.

The Income chargeable under head House Property would be added to the income computed under the other 5 heads of income in the income tax return and tax would be levied as per the income tax slab rates.

Terminologies Associated With Income From House Property

Annual value: This is the actual rent received or to be received by the property owner on renting out the house.

Municipal value: This is the value on house property as calculated by the municipal authorities for imposing municipal taxes.

Fair rent value: Fair rental value is the rent which a similar property with similar features in the same locality would fetch.

Standard rent: The standard rent is determined under the Rent Control Act. If the standard rent has been fixed for any property under the Rent Control Act, the property owner cannot charge a rent higher than the standard fixed rent.

Calculation of income from house property

Gross Annual Value (GAV): This is the highest of:

In case the Rent Control Act applies, Gross Annual Value will be the highest of:

  • Standard Rent
  • Rent Received
  • Net Annual Value: NAV is calculated as Gross Annual Value minus Municipal Taxes paid.
  • Deductions from income from house property

    Conditions associated with claiming tax exemption on home loan interest are:

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