House property comprises of any building or land of which the assesse is the proprietor. The building grounds might be as a patio or compound framing part of the building. Be that as it may, such land is to be recognized from an open plot of area, which is not charged under this head but rather under the head ‘Income from Other sources or Business Income’, all things considered. Additionally, house property incorporates apartments, shops, office space, industrial facility sheds, agrarian land and farm homes.
Further, house property incorporates all kind of house properties, i.e., private houses, godowns, silver screen building, workshop building, lodging building, and so forth.
Illustration: – Mr. David Smith has a bungalow in his name. It incorporates unfathomable open zone inside its limits. The house has been let out at a rent of INR 2,00,000 per month out of which lease of INR 50,000 per month is owing to the open area. For this situation, whole rental earnings are assessable under the head house property.
Fundamental conditions for putting earnings under this head
Income from house property is assessable in the hands of its legitimate proprietor in whose name the property stands. Owner for this reason implies a man who can practice the privileges of the proprietor not in the interest of the proprietor but rather in his own particular right. A man qualified for get pay from a property in his own particular right is to be dealt with as its proprietor, regardless of the possibility that no enrolled papers are executed in his name.
The accompanying three conditions must be fulfilled before the salary of the property can be included under the head “Income from House Property”:
- The property must comprise of structures and lands pertaining thereto;
- The assesse must be the property owner of such property;
- The property might be utilized for any reason, however it ought not be utilized by the proprietor for the motivation behind any business or calling carried on by him, the benefit of which is chargeable to impose. On the off chance that the property is utilized for own business or calling, it might not be eligible for taxation. Possession incorporates both free-hold and rent hold rights furthermore incorporates esteemed proprietorship
Tax Liability [Sec. 22]
The yearly estimation of property comprising of any building or grounds appurtenant thereto of which the assesse is the proprietor might be liable to Income- tax under the head ‘Income from House Property’ subsequent to asserting reasoning under Sec. 24, gave such property or any part of such property is not utilized by the assesse with the end goal of any business or calling, carried on by him, the benefits of which are chargeable to Income-charge.
