Rent and other income from any flat, building or land appurtenant thereto is usually taxed under the head “Income from House Property”. In this write-up we have tried to discuss some un-common facts about income from house property.

>> The tax payer constructed a house property by borrowing interest free loan; however he had to take interest bearing loan to repay the above interest free loan. Interest paid on such loan borrowed for repayment of original loan for acquiring house property is allowed even though the original loan is interest free;

>>The loss under the house property can be set off against under any other head for the same assessment year. Further, if there is a loss under the head “Income from House Property” and it cannot be or is not wholly set off against income from other head, the same can be carried forward and set off against income under same head.

>>In case where property is owned jointly by two or more persons, and where shares of such joint owners are definite and ascertainable, the income of such house property will be assessed in the hands of each co-owner separately. For the purpose of computing income from house property the rent/ annual value will be taken in proportion to his share in the property. However, where the share is not definite, the income of the property shall be assessed as that of an Association of persons.

>>> When the owner of the building gets along with the rent of the building, rent or hire of other assets (furniture) or charges for different services provided in the building, then if the composite rent is separable then the portion of rent for building will be taxed as “income from house property” or “Income from other sources” and when the rent is not separable then, the composite rent is taxes as “Income from house property” or “Income from other sources”.

>> As per section, interest chargeable under the income tax act, which is payable outside India on which tax has not been paid or deducted and in respect of which there is no person in India, who may be treated as an agent under section 163, shall not be deducted in computing the income chargeable under the head “Income from house property”.

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