income from house property basic conditionsbasic conditions –there should be a house property...
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INCOME FROM HOUSE PROPERTY
• Basic Conditions– There should be a House Property
– Should be owned by the assessee
– Should not be used for the business of the assessee, the income from which is taxable
HOUSE PROPERTY
• Meaning– Building
And / or Land attached to or connected
to the building • Commercial as well as Residential
OWNERSHIP
• Actual
• Deemed – Transfer by Husband to wife without
adequate consideration (except to leave apart)
– Part performance of an agreement
TYPES OF H.P• FLOP
• PLOP
• VLOP
• DLOP
• SOP/UOP
CALCULATION OF INCOME
• GAV– LESS MUNICIPAL TAX
• NAV– LESS DEDUCTION U/S. 24– ADD ADDITION U/S. 25
G.A.V
• FLOP/ PLOP/DLOP• R.L.V
– FAIR RENT– MUNCIPAL
VALUTION– STANDARD
RENT• ACTUAL RENT
• S.O.P/ U. O. P– Nil
• VLOP– If A.R lower than
R.L.V. due to Vacancy
EXAMPLE FOR RLV
• FAIR RENT
– OR• MUNCIPAL VALUTION
• WHICH EVER IS
• HIGHER
SECTION 24
• Standard Deduction– 30% of G.A.V.
• Interest on Loan borrowed for the H.P.– Pre-construction
– Post-construction
EXAMPLE FOR PRE-CONSTRUCTION
INTEREST• Loan taken on 1st April 2000
Rs.10,00,000 @ 12%• Construction completed on 2nd July
2002• Pre construction period=1/4/2000 to
31/3/2002• Pre construction interest = 2,40,000• Deduction over next five years
starting from 1/4/2002 to 31/3/2007 (20% each year) in addition of the annual interest
EXAMPLE FOR POST-CONSTRUCTION
INTEREST• FLOP/PLOP/VLOP/
DLOP– Loan taken for
construction/ purchase of the property
– No Limit
• SOP/ UOP– Loan taken for
construction/purchase of the property
– Rs.1,50,000 (Loan taken after 1-4.99)
– Rs.30000 (For prior period)
– Limit incl. repair loan repayment
SECTION 25
• Unrealized Rent
• Arrears of Rent