Annual value of any property comprising of building or land appurtenant thereto, of which the assesee is the owner is taxable in the hands of assessee as Income From house property. Property can be residential or commercial.
Income not taxable :
Annual value of any building or portion of a building occupied by the assessee for the purposes of business or profession carried on by him
What is Gross Annual Value
Gross Annual Value (GAV) is fair rent or municpal valuation whichever is higher, maximum subject to standard rent.
- If actual rent > fair rent, then actual rent is taken as GAV
- If actual rent < fair rent because of vacancy, then actual rent is taken as GAV, otherwise fair rent is taken as GAV
Types of House property
- Self-occupied property
- Let-out property
- If more than 1 properties are self-occupied & not leased, any one house property can be chosen as self-occupied & the remaining are treated as "deemed let-out properties“.
- 30% of the net annual value(for repair & maint,. fixed percentage)
- Interest on borrowed capital
- In case of let-out & deemed let-out property - can be fully claimed
- If house is self occupied ,If loan is used for repair, renovation or reconstruction of the house property, then deduction upto Rs. 30,000 is allowed(check details)
- If house is self occupied,If loan is used to acquire or construct property on or after 1.4.99 & where it is completed within 3 years from the end of the financial year in which loan is borrowed, then interest deduction upto Rs. 1.5Lakh shall be allowed.
- Rs. 1lakh additional for first time home loan seeker for loan upto Rs. 25 lakhs.(section 80EE)
- Loss from house property can be set off against
- non speculation business income
- short term capital gains &
- income from other sources of that year
- Any balance house property loss remaining, is allowed to be carried forward & set off within the next 8 assessment years, only against income from house property u/s 71B