Meaning and Chargeability

A house property could be your home, an office, a shop, a building or some land attached to the building like a parking lot. All types of properties are taxed under the head ‘Income from house property’ in the ITR.

1. Self-Occupied House Property

A self-occupied house property is used for one’s own residential purposes. This house may be occupied by the taxpayer’s family – parents and/or spouse and children. A vacant house property is considered as self-occupied for the purpose of Income Tax.

If more than one self-occupied house property is owned by the taxpayer, only one is considered and treated as a self-occupied property and the remaining are assumed to be let out. The choice of which property to choose as self-occupied is up to the taxpayer.

2. Let Out House Property

A house property which is rented for the whole or a part of the year is considered a let out house property for income tax purposes

Conditions for chargeability of income under house property [Section 22]

  1. Property should consist of any building or land appurtenant thereto.
    • Building Includes – Residential Buildings, factory Buildings, offices, shops, go-downs and other commercial premises.
    • Land appurtenant Means land connected with the building e.g. garden, garage etc.
  2. Assessee must be the owner of the property
    • Owner is the person entitled to receive income from house property.
    • Ownership includes deemed Ownership.
    • He must be the owner of the house property during the previous year.
  3. Use of property
    • The Property may be used for any purpose but should not be used for Business/ Profession carried by the owner.
    • The income earned by an assessee engaged in the business of letting out of property on rent would be taxable as business income.
  4. Property held as stock in trade
    • Annual Value of house property which is held as Stock-in-trade of business will be charged under the head “Income from house property”

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