Section 20(1)

The annual value of property consisting of any buildings or lands appurtenant thereto,

owned by the assessee

shall be chargeable to income-tax under the head “Income from house property”.

Annual value of Property to be determined as per section 21

Section 20(2)

The provisions of sub-section (1)

shall not apply to such portions of the property, as the assessee may occupy for his business or profession,

the profits of which are chargeable to income-tax.

(a)

Buildings include not only residential buildings, but also factory buildings, offices, shops, godowns and other commercial premises.

(b)

Land appurtenant means land connected with the building like garden, garage etc.

(c)

Income from letting out of vacant land is, taxable under the head

“Income from other sources” or

“Profits and gains from business or profession”

(a)

Owner is the person who is entitled to receive income from the property in his own right.

(b)

The requirement of registration of the sale deed is not warranted.

(c)

Ownership includes both free-hold and lease-hold rights.

(d)

Ownership includes deemed ownership.

(e)

The person who owns the building need not also be the owner of the land upon which it stands.

(f)

The assessee must be the owner of the house property during the tax year.

(g)

If the title of the ownership of the property is under dispute in a court of law, the decision as to who will be the owner will be determined by Income-tax Department till the court gives its decision to the suit filed in respect of such property.

(a)

The property may be used for any purpose i.e., commercial or residential purpose

(b)

It should not be used by the owner for the purpose of any business or profession carried on by him, the profit of which is chargeable to tax.

(c)

The income earned by an assessee engaged in the business of letting out of commercial properties on rent would be taxable as business income.

Supreme Court ruling in Rayala Corporation (P) Ltd. v. Asstt. CIT (2016) 386 ITR 500