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Unit 8: Income from House Property

the profits of which are chargeable to income-tax, the value of such property is not Notes
chargeable to tax under this head.

Thus, three conditions are to be satisfied for property income to be taxable under this
head.
1. The property should consist of buildings or lands appurtenant thereto.

2. The assessee should be the owner of the property.
3. The property should not be used by the owner for the purpose of any business or
profession carried on by him, the profits of which are chargeable to income-tax.

Self Assessment

Fill in the blanks:
1. According to the Income Tax Act in calculation of income from house property,
…………………..include residential buildings, buildings let out for business or profession
or auditoriums for entertainment programmes.
2. Where the land is not appurtenant to a building the income from land can be charged as
……………………….

3. Where the recipient of the income from house property is not the owner of the building,
the income is chargeable under the head ………………………
4. The income to a lessee from ……………………… a house or income to a mortgagee from
house property mortgaged to him is not chargeable under the head ‘Income from House
Property’.
8.2 Applicability of Section 22

The applicability of the Section 22 in respect to Income from House Property can be stated as
under:

Buildings or Lands Appurtenant Thereto

The term ‘building’ includes residential houses, bungalows, office buildings, warehouses, docks,
factory buildings, music halls, lecture halls, auditorium etc.
The appurtenant lands in respect of a residential building may be in the form of approach roads
to and from public streets, compounds, courtyards, backyards, playgrounds, kitchen garden,
motor garage, stable or coach home, cattle-shed etc., attached to and forming part of the building.
In respect of non-residential buildings, the appurtenant lands may be in the form of carparking
spaces, roads connecting one department with another department, playgrounds for the benefit
of employees, etc.
All other types of properties are excluded from the scope of Section 22. Rental income from a
vacant plot of land (not appurtenant to a building) is not chargeable to tax under the head
‘Income from house property’, but is taxable either under the head ‘Profits and gains of business
or profession’ or under the head ‘Income from other sources’, as the case may be. However, if
there is land appurtenant to a house property, and it is let out along with the house property, the
income arising from it is taxable under this head.

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