House Property Taxation

House Property Taxation – House Property Taxation refers to the method of computing and taxing income earned from owning property, such as residential or commercial buildings. Under the Income Tax Act, 1961, income from house property is one of the five heads of income. The taxable income is determined based on the property’s Gross Annual Value (GAV), after allowing deductions for municipal taxes paid and a standard deduction of 30% for maintenance expenses. If the property is self-occupied, its annual value is considered nil, whereas if it is rented or deemed to be let out, the actual or notional rent is taxable. Additionally, interest paid on a home loan for the purchase, construction, or renovation of the property is deductible under Section 24(b).

Example: Income from a rented apartment during FY 2022–23 is assessed and taxed in AY 2023–24 after applying eligible deductions.