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Income Tax Laws – I

Notes property, whether received by a dealer or a landlord, is taxable under the head ‘In come from
house property’. It will remain so even if the property is held by the assessee as stock-in-trade of
a business or if the assessee is a company which is incorporated for the purpose of building
houses and letting them on rent.

Disputed Ownership

If the title of ownership of a house property is disputed in a court of law, the decision as to who
is the owner rests with the Inco me-tax Department. Mere existence of dispute as to title cannot
hold up an assessment even if a suit has been filed. Generally the recipient of rental income or
the person who is in possession of the property is treated as owner.

House Property in a Foreign Country

A resident assessee is taxable under section 22 in respect of annual value of a property in a
foreign country. A resident but not ordinarily resident or a non-resident is, however, chargeable
under section 22 in respect of income of a house property situated aboard, provided income is
received in India during the previous year. If tax incidence is attracted under section 22 in respect
of a house property situated abroad, its annual value will be computed as if the property is
situated in India.

Did u know? Some incomes from house property are exempt from tax. They are neither
taxable nor included in the total income of the assessee for the rate purposes. These are:
1. Income from a farm house [section 2(1A) (c) and section 10(1)].
2. Annual value of one palace in the occupation of an ex-ruler [section 10(19A)].
3. Property income of a local authority [section 10(20)].

4. Property income of an approved scientific research association [section 10(21)].
5. Property income of an educational institution and hospital [section 10(23C)].
6. Property income of a registered trade union [section 10(24)].
7. Income from property held for charitable purposes [section 11].

8. Property income of a political party [section 13A].
9. Income from property used for own business or profession [section 22].
10. Annual value of one self occupied property [section 23(2)]

Self Assessment

Fill in the blanks:

5. ……………………….includes residential houses, bungalows, office buildings, warehouses,
docks, factory buildings, music halls, lecture halls, auditorium etc.
6. In respect of ……………………..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.
7. ………………………from a vacant plot of land (not appurtenant to a building) is not
chargeable to tax under the head ‘Income from house property’.

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