How to calculate Loss/Income from House Property India?

The Income / loss from a House Property in India is calculated as per the provisions of Income Tax Act, and it is taxable under the Head ‘Income from House Property India’. Computation of Income from House Property India:

Gross Annual Value (GAV) *See Note Below
Less: Municipal Taxes (Actually Paid & born by owner) XXX
Less: Amount of Unrealized Rent XXX
Net Annual Value (NAV) XXX

Less: Deductions under Section 24

    1. Standard Deduction (30% of NAV)
    2. Interest on Loan on Borrowed Capital (upto maximum of 1.5Lac)
 XXXXXX
Income chargeable to Tax under

XXX

*Calculation Of Gross Annual Value:

Follow 3 simple steps to calculate the gross annual value:

Step 1: Muncipal Rental Value OR Fair Rental Value which ever is higher

Step 2: Higher in step 1 OR Standard Rent whichever is lower, it is called expected rent.

Step 3: Expected Rent OR Actual Rent which ever is higher is called Gross Annual Value

What is Composite Property?

When property is let out with other form of services (e.g. watchman, sweeper etc) is called Composite property. Income related to such House Property is chargeable under the heads ‘Income from House Property India’ and other suitable heads like ‘Profit or Gains of Business or Profession’ (PGBP) or ‘Income from Other Sources’.

When property is let out with other assets such as AC, Car etc.. If other assets are inseparable from property (e.g. AC) then whole amount would taxable under Profit & Gains under Business & Profession (PGBP)

If assets are separable from property (e.g. car) then income from House Property in india is chargeable under ‘Income from House Property’ and other income is chargeable under PGBP/ Other Sources as the case may be.