House Property

1. Self-Occupied Property (SOP)

   • Used by owner for personal residence.

   • Only one property qualifies for SOP → Gross Annual Value (GAV) = Nil.

   • Deduction: Interest on housing loan up to ₹2,00,000 (u/s 24b).

2. Let-Out Property

   • Property rented/leased to others.

   • Rent received is taxable as Income from House Property.

   • Deductions allowed:

     • Municipal Taxes paid

     • Standard Deduction: 30% of Net Annual Value (NAV)

     • Interest on housing loan (full amount)

3. Deemed to be Let-Out Property

   • If a person owns more than 2 houses, extra houses are deemed let out (post Budget 2019).

   • Notional rent is taxed even if property is vacant.

4. Under-Construction Property

   • No income is taxable until construction is complete.

   • Interest paid during construction can be claimed in 5 equal installments starting from the year construction completes.

• Assessee must be owner of the property.
• Property must consist of a building or land attached to it.
• Property not used for business/profession.

⚠️ Rent from vacant land → taxed under Income from Other Sources, not under house property.

1. Determine Gross Annual Value (GAV)

   • Self-occupied → GAV = Nil

   • Let-out → Actual rent received/receivable

2. Less: Municipal Taxes Paid

   • Deducted only if actually paid by the owner.

3. Net Annual Value (NAV)

   • NAV = GAV – Municipal Taxes

4. Less: Standard Deduction (30% of NAV)

   • Allowed irrespective of actual expenses.

5. Less: Interest on Home Loan (u/s 24)

   • Self-occupied: up to ₹2,00,000

   • Let-out: full interest allowed

6. Result → Income from House Property

   • Loss can be adjusted against other income (max ₹2,00,000/year for SOP).

Let-Out Property:

• Rent received = ₹2,00,000
• Municipal Taxes = ₹10,000
• Loan Interest = ₹1,00,000

Self-Occupied Property:

• Municipal Value = ₹2,50,000
• Municipal Taxes = ₹53,000
• Loan Interest = ₹2,88,000

Deemed Let-Out Property:

• Municipal Value = ₹1,45,000
• Fair Rent = ₹1,36,000
• Standard Rent = ₹1,24,000
• Actual Rent = ₹1,15,000
• Loan Interest = ₹3,50,000
• Municipal Taxes paid by tenant = ₹5,400

• Standard Deduction – 30% of NAV
• Interest on Housing Loan

• Self-occupied: up to ₹2,00,000

• Let-out: full interest

• Section 24(b): Interest deduction up to ₹2,00,000
• Section 80C: Principal repayment up to ₹1,50,000
• Section 80EE: Extra deduction ₹50,000 (first-time home buyers)
• Section 80EEA: Extra deduction ₹1,50,000 (affordable housing up to ₹45 lakh)Joint Owners & Co-Borrowers:
• Each owner/borrower can claim loan interest (₹2,00,000 each) + principal repayment (₹1,50,000 each).
• Only co-borrower, not owner → No deduction
• Only co-owner, not borrower → No interest deduction

• Make property jointly owned (split tax benefits).
• Let out vacant houses (avoid notional rent taxation).
• Claim maximum deductions on loan interest & principal.
• Optimize self-occupied vs deemed let-out properties annually.
• Claim both HRA (for rented house) + home loan benefits (for owned house).

• Municipal Value: Value set by local authority for tax
• Fair Rent: Rent for similar property in same area
• Standard Rent: Maximum rent under Rent Control Act
• Net Annual Value (NAV): GAV – Municipal Taxes
• Actual Rent Received: Actual rent collected by owner