House Property Income Exempted From Income Tax

The government of India levies taxation on the earnings of a person from income earned from house property. Income from house property must be included as an element of the entire income of the taxpayer while filing a tax return. during this article, we briefly discuss a number of the house property incomes exempted from the tax that be the top of income called ‘Income from House Property.

House Property Income Exempted From Income Tax

House Property Incomes – Exempted From Tax

There are special examples where the income from house property is tax-free. they’re neither taxable nor included within the total income for taxation. The incomes that are exempted from tax are interpreted  as follows:

  1. The revenue generated from the buildings in and around the agricultural land that forms an element of agricultural income is exempted from tax as per section 10(1). samples of this type of income include renting or leasing of a farmhouse, storehouse, or godown.


2. Income from equity restricted to local authorities is tax-exempted as per Section 10(20).

3. House property income of an organization is free from tax under Section 13A.

4. Revenue earned from a property belonging to an approved research project association is exempted from tax under Section 10(21).

5. Property income of academic organizations, medical and organizations are free from tax as per Section 10(23C).

6. Income from property subjected to charitable or spiritual purposes is tax-exempted as per Section 11.

7. Property income of a Certified organization is exempted from tax under Section 10(24).

8. The annual value of 1 palace possessed by an ex-ruler of Indian states is free from tax as per Section 10(19A) whereas other palaces come under taxation.

9. The annual value of 1 self-occupied property for own residence is exempted from tax under Section 23(2).

10. Income from property used for one’s own business or profession is additionally tax-exempted under Section 22.

Amendment of Section 23 vide Finance Act, 2017

A certificate from the competent authority is often acquired for the annual value to be taken as nil for the house property (a building that can be used for residential, industrial, or commercial purposes) that’s not unleashed or detained as stock during the entire or a part of the yr. The assessee can have the benefit of the amendment if the property is vacant for an element of or the full year. Also, buildings used for commercial or business purposes, that depreciation is claimed in accordance with the provisions of the Act, won’t be the purview of Income from House Property but shall be taxable under the pinnacle of Business Income

Unleash House Property

A house property that is rented for the entire or an element of the year is taken into account as unfettered house property for tax purposes

Inherited Property

An inherited property i.e. one bequeathed from parents, grandparents, etc again, can either be a self-occupied one or a set free one supported by its usage as discussed above.

House Property Income Exempted From Income Tax

How to calculate Income From House Property

Here is how you calculate your income from house property:

a. Determine Gross Annual Value (GAV) of the property: The gross annual value of a self-occupied home is zero. For an unfettered property, it’s the rent collected for a house on rent.

b. Reduce Property Tax: capital levy, when paid, is allowed as a deduction from the GAV of property.

c. Determine Net Annual Value(NAV) : Net Annual Value = Gross Annual Value – land tax

d. Reduce 30% of NAV towards standard deduction: 30% on NAV is allowed as a deduction from the NAV under Section 24 of the revenue enhancement Act. No other expenses like painting and repairs may be claimed as tax relief beyond the 30% cap under this section.

e. Reduce home equity loan interest: Deduction under Section 24 is additionally available for interest paid during the year on the housing loans availed.

f. Specify Income from house property: The occurring price is your income from house property. this is often taxed at the slab rate applicable to you.

g. Loss from house property: after you own a self-occupied house, since its GAV is Nil, claiming the deduction on loan interest will lead to a loss from house property. This loss is often adjusted against income from other heads.

Note: When a property is unfettered, its gross annual value is the rental value of the property. The rental value must be over or capable of the reasonable rent of the property determined by the municipality.

Tax Deduction on Home Loan

write-down on loan Interest: Section 24

Homeowners can claim a deduction of up to Rs 2 lakh on their loan interest if the owner or his family resides within the house property. the identical treatment applies when the home is vacant. If you’ve got rented out the property, the complete consumer credit interest is allowed as a deduction.

However, your deduction on interest is proscribed to Rs. 30,000 rather than Rs 2 lakhs if any of the subsequent conditions are satisfied: