Income from house property is one of the five heads of income under the Indian Income Tax Act, 1961. It refers to the rental income earned from a building or land appurtenant thereto, owned by an individual or entity, excluding properties used for business or professional purposes. The taxable value is based on the Annual Value of the property, which is the higher of the fair rent, municipal valuation, or actual rent received, subject to standard deductions. Properties that are self-occupied or used for one’s own residence are exempt from tax up to a limit, but if more than two properties are self-occupied, others are deemed let-out.
According to Sections 22 to 27 of the Income Tax Act, 1961, income from house property is chargeable to tax under Section 22. Section 23 defines how to determine the Annual Value, and Section 24 allows for deductions such as a standard deduction of 30% of the Net Annual Value and interest on borrowed capital (up to ₹2,00,000 for self-occupied properties). Section 25 outlines inadmissible deductions, while Section 27 clarifies “deemed ownership” in situations like properties transferred without adequate consideration or held under lease agreements.
To remember the taxation rules under “Income from House Property,” use the mnemonic “H.A.S.I.”:
H – Head of Income (One of the five heads under Section 22)
A – Annual Value (Section 23 – how it’s calculated)
S – Standard Deduction & Interest (Section 24 – 30% + interest)
I – Inadmissible & Deemed Owner (Sections 25 & 27 – exclusions and special cases)
