Tag: House Property

Deemed Let-Out Property: Third House, Vacant House and Tax Rules (Tax Year 2026-27)

Posted on by CA Meet Dhrangadhariya

Last updated: 05 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Only two houses of an owner can have a nil annual value as self-occupied; every other house is taxed on the rent it could reasonably fetch, even if it is vacant (section 21(6) and (7) of the Income-tax Act, 2025).
  • The phrase “deemed let-out” is commentary; the Act does not use it. It describes a third or further house that is not actually let.
  • Municipal taxes paid, the 30% deduction and the whole interest are allowed against that notional rent, so the result is often a small income or a loss.
  • The owner chooses which two houses are treated as self-occupied.

If you own more than two houses, tax may be due on a house that earns you nothing. Commentators call it a “deemed let-out” property. This post explains the rule in the Income-tax Act, 2025 and shows how the tax is worked out.

What the Act says

Section 21(6): the annual value of a house or part of it is nil if the owner occupies it for his own residence or cannot actually occupy it due to any reason.

Section 21(7): this applies only to two houses that you specify, and does not apply if the house is actually let at any time in the year or you derive any other benefit from it.

The Act does not use the words “deemed let-out”. They describe the result: a house beyond your two specified houses is taxed on its annual value, which under section 21(1) is the higher of the rent it could reasonably be expected to fetch and the actual rent. If it is not let, the notional rent is the annual value.

What is not a deemed let-out property

  • A house you live in, up to two houses in total.
  • A second house that is vacant because you work or live elsewhere. It qualifies as one of your two, and the reason does not matter.
  • A house held as stock-in-trade by a builder or dealer and not let at any time in the year: its annual value is nil up to two years from the end of the financial year in which the completion certificate is obtained (section 21(5)).
  • A house that you occupy for your own business or profession (section 20(2)): it is outside this head, and the profits are business income.

How the income is worked out

  1. Annual value is the rent the house could reasonably be expected to fetch (nothing is actually received).
  2. Less local taxes actually paid by you during the year.
  3. Less 30% of the annual value.
  4. Less the whole interest on any loan for the house. The ₹2,00,000 limit for self-occupied houses does not apply here.

Example. Mr A owns three houses. He lives in one and the other two are vacant. He specifies the house he lives in and one vacant house as his two self-occupied houses. The third house could fetch ₹40,000 a month. He paid ₹10,000 of municipal tax and has ₹3,00,000 of interest on its loan.

Step Amount (₹)
Annual value (40,000 × 12) 4,80,000
Less: municipal tax paid 10,000
Net annual value 4,70,000
Less: 30% of annual value 1,41,000
Less: interest on the loan 3,00,000
Income from house property 29,000

Many articles show this result as a loss of ₹29,000. It is income of ₹29,000: 4,70,000 - 1,41,000 - 3,00,000 = ₹29,000.

If the interest were ₹4,00,000, the result would be a loss of ₹71,000. In the old regime that could be set off against other income, up to ₹2,00,000, and any balance carried forward for eight tax years. In the new regime it cannot be set off against other heads or carried forward (sections 109, 110 and 202).

Choosing your two houses

The choice is yours and you make it in the return. A house you specify has a nil annual value, so no tax on notional rent, but its interest is capped (₹2,00,000 in total across such houses, and only in the old regime). A house that is not specified is taxed on its notional rent, with a 30% deduction and the whole interest.

As a rule, specify as self-occupied the houses whose notional rent (after the 30% deduction) is largest compared with their interest, because that removes the most income from tax. Leave as taxed houses the ones with large interest, where the interest reduces the tax, subject to the loss rules above. Check the result for each combination before you file.

Old and new regime

  • Old regime: interest on a self-occupied house is capped (₹2,00,000 in total); on a deemed let-out house it is not, and loss set-off is up to ₹2,00,000.
  • New regime: interest on a self-occupied house is not allowed at all; the deemed let-out house keeps the full interest deduction but any loss cannot be set off or carried forward.

Common mistakes

  • Not reporting the notional rent of a vacant third house. It is income even though nothing is received.
  • Treating a house that is let for part of the year as self-occupied. Letting at any time in the year takes it out of section 21(6).
  • Taking the municipal valuation or the rent of a different house as the expected rent. Use what the house could reasonably fetch, and keep evidence such as local rents or a broker’s note.
  • Forgetting the interest certificate for the house.

Where to report it

In the house property schedule of the return, mark the house as self-occupied or as let out or deemed let out, and give the annual value, taxes paid and interest. If you own more than one house, the simplest return form cannot be used; check which form you need.

Frequently asked questions

What is a deemed let-out property?

A house, beyond the two that you specify as self-occupied, that is not actually let. The annual value of such a house is the rent it could reasonably be expected to fetch, so tax is charged on that notional rent even though you receive nothing.

How many houses can I treat as self-occupied?

Two, as specified by you (section 21(7)(a)). The annual value of those houses is nil if you occupy them for your own residence or cannot actually occupy them for any reason.

Do I pay tax on a vacant third house?

Yes, on the annual value, which is the rent it could reasonably be expected to fetch, less the taxes paid, 30% of the annual value and interest on the loan.

Can I choose which houses are the two self-occupied ones?

Yes. You specify them in the return. Work out the tax for each combination and pick the one that gives the lower tax.

Is any vacant house exempt from this?

A house held as stock-in-trade by a builder or dealer and not let at any time in the year has a nil annual value up to two years from the end of the financial year in which the completion certificate is obtained (section 21(5)).

Is interest on a deemed let-out house fully deductible?

Yes. There is no ₹2,00,000 cap because the cap in section 22(2) applies only to houses covered by section 21(6). A resulting loss is subject to the set-off rules.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Rental Income: House Property or Business Income? Supreme Court Tests (Tax Year 2026-27)

Posted on by CA Meet Dhrangadhariya

Last updated: 22 July 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Rent from a building you own is taxed as income from house property (section 20 of the Income-tax Act, 2025), with only taxes, a flat 30% and interest as deductions.
  • If letting is itself your business, the same rent can be business income, with actual expenses and depreciation allowed. This depends on facts, not on your choice.
  • The Supreme Court decided this in Chennai Properties (2015), Rayala Corporation (2016) and Raj Dadarkar (2017): look at what the owner actually does, from a businessman’s point of view.
  • A person with long-term rights in a building, such as a lease of 12 years or more, is a deemed owner under section 25, and the rent from sub-letting can be house property income.

Rent from a property can be taxed under two heads, and they are taxed very differently. House property income allows only a flat 30% deduction, local taxes and loan interest. Business income allows the real costs of running the activity. The choice is not yours. It follows from what you actually do.

The two heads

House property (section 20). The annual value of a building and its appurtenant land that you own is chargeable to tax as income from house property, except for the part you occupy for your own business or profession. The deductions are the local taxes you paid, 30% of the annual value and interest on borrowed capital (sections 21 and 22).

Business income (section 26). Profits of a business carried on at any time in the year. If letting out property is itself a business, its profits are computed under the business provisions, with deductions such as salaries of staff, repairs, insurance, depreciation and interest, and the usual books of account.

What the Supreme Court has said

The Court looks at the activity, not just the ownership or the wording of a document.

Case Facts in brief Result
Chennai Properties and Investments Ltd v CIT (09/04/2015) A company whose main object was to acquire properties and let them out; its only income was rent Business income. The object clause alone is not decisive. It depends on the circumstances whether letting is the business
Rayala Corporation Pvt Ltd v ACIT (11/08/2016) A company whose only business was leasing its property and earning rent Business income, following Chennai Properties
Raj Dadarkar and Associates v ACIT (09/05/2017) A partnership firm held a long-term licence over market space, built 95 shops and 30 stalls and sub-licensed them, collecting licence fees and service charges House property income. The firm was a deemed owner; the service charges were inseparable from the rent, and it did not provide organised, systematic services

The test the Court applied in Raj Dadarkar was whether, from a businessman’s point of view, the letting was the doing of a business or the exploitation of property by an owner. In Chennai Properties, where the entire income was from letting properties owned by the company, letting was the business. In Raj Dadarkar, ownership of the property characterised the activity.

A reading to avoid: some articles say Raj Dadarkar held that sub-letting as an activity makes the income business income. On its facts the Court held it was house property income.

Signs that point to business

  • The object and the main activity of the person are letting properties, and that is the only or main source of income.
  • The activity is organised: staff, systematic management, a range of services (not only the use of space), and books of account.
  • Several properties are let continuously, and letting is exploited commercially rather than as a way of holding an asset.
  • The income comes from services (a hotel, a hostel, a co-working space, a hall with caterers), not just the right to occupy.

Signs that point to house property

  • You own one or a few properties and let them as an investment.
  • The rent is for occupation of the building. Any service charge is a minor, inseparable part of the rent.
  • The owner does no organised business activity around the letting.
  • You have acquired rights in the building of the kind listed in section 25(e), such as a lease of 12 years or more, and you sub-let it: you are a deemed owner, so the rent is house property income. That was the basis of Raj Dadarkar, where the firm held long-term rights under a licence.

Worked comparison

A property is let at ₹35,000 a month. Local taxes paid ₹20,000, loan interest ₹60,000.

As house property

Step Amount (₹)
Annual value (35,000 × 12) 4,20,000
Less: local taxes 20,000
Net 4,00,000
Less: 30% 1,20,000
Less: interest 60,000
Income 2,20,000

As business income, if letting is genuinely a business, with actual running costs of ₹1,10,000 (staff ₹60,000, repairs ₹30,000, insurance ₹10,000, depreciation ₹10,000) in addition to taxes and interest:

Step Amount (₹)
Rent 4,20,000
Less: taxes 20,000
Less: interest 60,000
Less: running costs 1,10,000
Profit 2,30,000

The business head is not always lower: in this case the flat 30% deduction under house property is larger than the real costs. A business also brings the burden of books of account and, above the limits, audit. Do not claim a head only for the tax result.

Other points

  • Loss: a house property loss can be set off against other income only up to ₹2,00,000 in the old regime, and not at all in the new regime. A business loss is treated differently (section 109), though it cannot be set off against salary.
  • Basic exemption: if rent is your only income, tax is nil up to the basic exemption limit of your regime, after the deductions for the head.
  • Documentation: keep the agreement, rent receipts, and for a business, evidence of services provided and of the staff and records.

Before you rely on this

The rulings are on their own facts and later cases apply them to different set-ups, so a case-specific opinion is worth having if the amount is large or the Assessing Officer questions your head. The sub-letting position of a deemed owner follows section 25(e) of the 2025 Act (earlier section 27(iiib)).

Frequently asked questions

Is rental income house property income or business income?

Usually house property income. It is business income only when letting is itself the business, as the Supreme Court found in Chennai Properties and Rayala Corporation, where the company’s main business was letting its properties.

Does the object clause of the company decide it?

No. In Chennai Properties the Court said that an entry in the objects is not decisive; the question depends on the circumstances of each case, from a businessman’s point of view.

Who decides which head applies?

The facts decide, and in a return you must report under the head the facts support. The Assessing Officer can differ. You cannot pick the more favourable head.

What deductions are allowed under each head?

House property: local taxes paid, 30% of the annual value and interest on borrowed capital. Business: expenses allowed under the business provisions of the Act (such as staff, repairs, insurance, depreciation and interest), which usually need books of account.

What did Raj Dadarkar decide?

That a partnership firm which held a long-term licence and sub-licensed shops, earning rent and service charges that were inseparable from the rent, was a deemed owner and its income was house property income, not business income.

Is sub-letting income house property or other income?

If you are a deemed owner under section 25 (for example, you hold a lease of 12 years or more), it is house property income. Otherwise it is business income or income from other sources depending on the facts.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

What are the 5 Heads of Income Tax?

Posted on by CA Meet Dhrangadhariya

Last updated: 17 July 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • All income is sorted into five heads: salary, house property, profits and gains of business or profession, capital gains, and income from other sources.
  • Each head has its own rules for what is taxable and which expenses and deductions are allowed.
  • Capital gains are taxed by holding period and asset type, for example 12.5% on long-term gains from most assets sold on or after 23 July 2024.
  • Correct classification decides how tax is computed and which ITR form you file.

Under the Income Tax Act, all income is sorted into five heads of income: salary, house property, profits and gains of business or profession, capital gains, and income from other sources. Each head has its own rules for what is taxable and which expenses and deductions are allowed. Putting each income under the correct head is the first step in computing tax and in choosing the right ITR form. The five heads continue under the Income-tax Act, 2025 (from 1 April 2026), although section numbers have changed. Section numbers quoted below are those of the 1961 Act.

The Five Heads of Income

  1. Income from Salary
  2. Income from House Property
  3. Profits and Gains of Business or Profession
  4. Capital Gains
  5. Income from Other Sources

1. Income from Salary

Salary is income received under a contract of employment. It includes basic pay, allowances, advance salary, bonus, commission, perquisites, gratuity, leave encashment and pension.

  • Section 15 describes what is taxable as salary.
  • Section 16 gives the deductions from salary, mainly the standard deduction.
  • Section 17 defines salary, perquisites and profits in lieu of salary.

Some allowances are exempt in the old regime, for example House Rent Allowance (HRA) for those living in rented houses. A transport allowance of up to ₹3,200 per month for certain specially-abled employees (Rule 2BB) is exempt in both regimes. The new regime allows very few other exemptions but gives a standard deduction of ₹75,000 (₹50,000 in the old regime).

2. Income from House Property

Rent from a building or land attached to it is taxed under this head. The tax is computed on the annual value of the property, less municipal taxes and the standard deduction of 30%, less interest on a home loan.

There are three kinds of property:

  1. Self-occupied property
  2. Let-out property
  3. Deemed let-out property

Up to two self-occupied houses are treated as self-occupied with nil annual value. Any other house is treated as deemed let-out. Interest on a loan for a self-occupied house is allowed up to ₹2 lakh in the old regime. Income from a house property is reported in Schedule HP of the ITR.

3. Profits and Gains of Business or Profession

Profits from any business or profession are taxed under this head after deducting the expenses allowed. It covers:

  • Profits of a trade, manufacture or service business, and professional income.
  • Income taxed under the presumptive schemes of sections 44AD, 44ADA and 44AE.
  • Profit or loss from futures and options trading and intraday trading in shares (speculative income is treated separately).
  • Salary, bonus, commission and interest received by a partner from the firm, to the extent allowed.
  • Certain incentives, licences and export benefits connected to the business.

Individuals and HUFs with business or professional income file ITR-3, or ITR-4 under the presumptive scheme.

4. Capital Gains

Profit from selling a capital asset such as property, shares, mutual funds, gold or bonds is taxed under capital gains. The gain is short-term or long-term, depending on how long the asset was held.

Asset Held for long-term if more than Short-term gain tax Long-term gain tax (sale on or after 23 July 2024)
Land and building 24 months Slab rates 12.5% without indexation
Unlisted shares 24 months Slab rates 12.5% without indexation
Listed shares and equity mutual funds 12 months 20% 12.5% on gains above ₹1.25 lakh a year
Other assets such as gold 24 months Slab rates 12.5% without indexation
Debt mutual funds bought after 1 April 2023 Not applicable Slab rates Slab rates

For land and buildings bought before 23 July 2024, resident individuals and HUFs can choose to pay 20% with indexation instead of 12.5% without it. Capital gains are reported in Schedule CG, and individuals with capital gains generally file ITR-2 or ITR-3.

5. Income from Other Sources

Anything that is taxable but does not fall under the four heads above comes here. Common examples are interest on savings accounts and fixed deposits, dividends, winnings from lotteries and games, gifts above the limit, and rent from plant, machinery or furniture when it is not business income.

Heads of Income vs Sources of Income

A source of income is where the money comes from, for example a salary, a fixed deposit, a rented flat or a business. A head of income is the tax category the Act puts that source into. Many sources can fall under one head, and each head has its own computation rules.

Conclusion

Knowing the five heads helps you report each income in the right place, claim the deductions that belong to it and file the correct ITR form. Consult a qualified professional if an income is difficult to classify.

Frequently asked questions

What are the 5 heads of income?

Income from salary, income from house property, profits and gains of business or profession, capital gains, and income from other sources.

Which head does interest income come under?

Interest on savings accounts and fixed deposits is taxed under Income from Other Sources, unless it is a business receipt.

What is the difference between a head and a source of income?

A source is where the money comes from, such as a job or a rented flat. A head is the tax category the Act puts that source into.

Do the five heads continue under the Income-tax Act, 2025?

Yes. The five heads continue from 1 April 2026, with new section numbers.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Income From House Property: How It Is Computed and Taxed (Tax Year 2026-27)

Posted on by CA Meet Dhrangadhariya

Last updated: 23 August 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Income from house property is the annual value of a building and its appurtenant land owned by you, less municipal taxes paid, a 30% standard deduction and interest on borrowed capital (sections 20 to 22 of the Income-tax Act, 2025).
  • The annual value is the higher of the rent the property could reasonably fetch and the actual rent; for up to two self-occupied houses it is nil.
  • A loss from house property can be set off against other income only up to ₹2,00,000 (old regime); the excess carries forward for 8 tax years against house property income. The new regime allows no set-off against other heads and no carry forward.
  • Co-owners with definite shares are taxed separately on their shares, and a person who is a deemed owner under section 25 is taxed as owner.

Rent from a house, flat, shop or office that you own is taxed under the head “Income from house property”. The head also applies to a house you live in, where the tax is nil but the home loan interest matters. From 01/04/2026 the rules are in sections 20 to 25 of the Income-tax Act, 2025 (they were sections 22 to 27 of the 1961 Act).

What is taxed under this head

  • Section 20(1): the annual value of property consisting of any building or land appurtenant to it (parking, garden or courtyard), owned by you.
  • Section 20(2): the head does not apply to the part of the property you occupy for your own business or profession, whose profits are taxed as business income.
  • Rent from a building, as such, is taxed here even if the tenant is a business. If the letting is itself your business, the income may be business income (see our post on house property income and business income).

Who is the “owner”

You are taxed as owner if you are the legal owner, or are treated as owner under section 25:

  • an individual who transfers a property to his or her spouse (other than under an agreement to live apart) or to a minor child (other than a married daughter) without adequate consideration;
  • the holder of an impartible estate;
  • a member of a co-operative society, company or association to whom a building is allotted or leased under a house building scheme;
  • a person allowed to take or retain possession in part performance of a contract (section 53A of the Transfer of Property Act, 1882);
  • a person who acquires rights in a building by sale, exchange or a lease of 12 years or more (month to month leases and leases up to one year are excluded).

Co-owners: where shares are definite and ascertainable, each co-owner is taxed on his or her own share and they are not an association of persons. The relief for self-occupied houses is available to each co-owner separately (section 24).

How income is computed

Step Rule
1. Annual value The higher of (a) the sum for which the property might reasonably be expected to let from year to year and (b) the actual rent received or receivable (section 21(1))
2. Adjust for vacancy If the property was let but vacant for part of the year and the actual rent is lower because of the vacancy, the annual value is the actual rent received or receivable (section 21(2))
3. Unrealised rent Rent that cannot be realised is left out, if the conditions in Rule 21 are met (below)
4. Less: local taxes Taxes levied by a local authority and actually paid by the owner during the tax year, whenever they fell due (section 21(3)). Taxes paid by a tenant are not deducted
5. Less: 30% of annual value Section 22(1)(a), whether or not you spent anything on repairs
6. Less: interest Interest on money borrowed to acquire, construct, repair, renew or reconstruct the property (section 22(1)(b)); see our post on home loan interest
Income from house property The balance, which can be a loss

The older provisions listed municipal value, fair rent and standard rent. Section 21 now speaks only of the sum the property can reasonably be expected to fetch. Municipal valuation and comparable local rents remain sensible evidence of that sum.

Unrealised rent (Rule 21)

Rent not paid by a tenant is left out when it is proved lost and irrecoverable, and:

  1. the tenancy is bona fide;
  2. the defaulting tenant has vacated, or steps have been taken to make him vacate;
  3. the tenant is not in occupation of any other property of yours; and
  4. you have taken all reasonable steps to sue for the rent, or satisfy the Assessing Officer that legal proceedings would be futile.

If you recover that rent later, it is taxed in the year you receive it, with a deduction of 30% (section 23).

Houses held as stock-in-trade

A builder’s unsold house that is not let at any time in the year has an annual value of nil up to two years from the end of the financial year in which the completion certificate is obtained (section 21(5), as amended by the Finance Act, 2026).

Self-occupied houses

The annual value of a house you occupy as your residence, or cannot occupy for any reason, is nil, but only for two houses that you specify (section 21(6) and (7)). It does not apply if the house is let at any time in the year or you get any other benefit from it. Any other house is taxed on its annual value even if it is vacant. Our post on deemed let-out property covers this.

With a nil annual value there is no 30% deduction. The only deduction is home loan interest, within the limits in section 22(2), and that creates a loss.

Examples

1. Let-out house. Rent ₹35,000 a month, so ₹4,20,000 a year. The reasonable rent is ₹3,90,000, municipal tax paid ₹12,000, loan interest ₹1,00,000.

  • Annual value: higher of 3,90,000 and 4,20,000 = ₹4,20,000
  • Less taxes paid: ₹12,000 = ₹4,08,000
  • Less 30%: ₹1,22,400
  • Less interest: ₹1,00,000
  • Income from house property = ₹1,85,600

2. Vacancy. A flat could fetch ₹40,000 a month (₹4,80,000 a year) but was vacant for two months, so rent received is ₹4,00,000. Because the actual rent is lower owing to vacancy, the annual value is ₹4,00,000.

3. Loss from a let-out house. Annual value less taxes ₹4,08,000, 30% deduction ₹1,22,400, interest ₹5,50,000. The result is a loss of ₹2,64,400.

  • Old regime: ₹2,00,000 is set off against other income, such as salary; the balance of ₹64,400 carries forward for up to eight tax years against house property income only.
  • New regime: the loss cannot be set off against any other head and it is not carried forward.

Arrears of rent

Arrears of rent received from a tenant, or unrealised rent realised later, are income from house property in the year of receipt, whether or not you still own the property, with a deduction of 30% (section 23).

House property loss: set-off and carry forward

Point Old regime New regime
Set-off against other house property income in the same year Yes Yes
Set-off against other heads Up to ₹2,00,000 (section 109(1)(b)) Not allowed (section 202(2)(b)(ii))
Carry forward of the balance Eight tax years, against house property income only (section 110) Not allowed (section 202(3))

Old and new section numbers

Topic 1961 Act 2025 Act
What is taxed Section 22 Section 20
Annual value Section 23 Section 21
Self-occupied houses Section 23(2) and (4) Section 21(6) and (7)
30% deduction and interest Section 24 Section 22
Arrears of rent Section 25A Section 23
Co-owners Section 26 Section 24
Deemed owner Section 27 Section 25
Set-off of loss Section 71 Section 109
Carry forward of loss Section 71B Section 110

The 1961 Act applies up to tax year 2025-26 (income of FY 2025-26); the 2025 Act applies from 01/04/2026.

Where to report it

Income from house property is reported in the house property schedule of the return. Give the address, whether the house is self-occupied, let out or otherwise, the co-owners and their shares, the rent, the taxes paid and the interest. Return forms with more than one house property, or with a loss to carry forward, need the fuller forms and not the simplest one. Check which form fits before you file.

Frequently asked questions

Which income is taxed under the head income from house property?

The annual value of any building or land appurtenant to it that you own (section 20). Property you occupy for your own business or profession is excluded, because its profits are taxed as business income.

How is annual value decided?

It is the higher of the sum for which the property could reasonably be expected to let from year to year and the actual rent received or receivable (section 21(1)). If it was let but stood vacant and the actual rent is lower because of the vacancy, the annual value is the rent actually received or receivable (section 21(2)).

What deductions are allowed?

Municipal and similar local taxes actually paid by the owner in the year, then 30% of the annual value and interest on borrowed capital (section 22). Nothing else, such as repairs or insurance, is allowed separately.

Can I have two self-occupied houses?

Yes. The annual value of up to two houses that you specify and occupy, or cannot occupy for any reason, is nil (section 21(6) and (7)). Any other house is taxed on its annual value even if it is vacant.

How much house property loss can I set off?

Under the old regime, up to ₹2,00,000 against income under other heads (section 109(1)(b)); any balance carries forward for eight tax years against house property income only (section 110). Under the new regime the loss cannot be set off against other heads and is not carried forward.

Who is taxed when a property is co-owned?

Each co-owner with a definite and ascertainable share, on that share. They are not taxed as an association of persons (section 24).

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.