Comparison of Section 21 "Determination of annual value" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....mmovable property, assessees with stock-in-trade property, and tax administration. Effective date: Not stated in the document. Background & Scope Statutory hook: Clause 21 of the Income Tax Bill, 2025, addressing "Determination of annual value" within the chapter concerning "Income from house property" and framed for the purposes of section 20. The Clause defines how annual value is to be computed and lists specific circumstances affecting computation. Definitions: Not stated in the document beyond the textual usage of terms such as "owner", "let", "annual value", "tax year", and "competent authority". Statutory Provision Mode Text & Scope Clause 21 prescribes the following: (1) Annual value is the higher of (a) the expected rent ("sum....

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....e: reduction of annual value by local taxes actually paid (sub-sec (3)); exclusion of unrealised rent subject to rules (sub-sec (4)); temporary nil annual value for stock-in-trade post-completion certificate for two years (sub-sec (5)); self-occupation exemption limited to two houses and disapplied where let or benefits arise (sub-sec (6) & (7)). Other exceptions or conditions: Not stated in the document. Illustrations * Example 1: A residential unit expected to command Rs. 30,000 p.m. but actually let at Rs. 25,000 p.m. for whole year. Under Clause 21(1), annual value = higher of expected (Rs. 360,000) or actual (Rs. 300,000) = Rs. 360,000. * Example 2: Same unit let in normal course but vacant for three months; actual rent receiv....

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....be deemed to be the amount so received or receivable." * Practical implication: The enacted text links the vacancy to a resultant reduction in actual rent and requires a comparison with the notional expected letting value in (1)(a) before fixing annual value at actual rent. The Old Bill adopted a broader trigger ("let in normal course" + vacancy) and directly prescribed use of actual rent under (1)(b). The As-Passed version is therefore narrower and contains an explicit comparative test; it may limit instances where actual lower rent is treated as annual value. * Sub-section (5) wording - completion certificate: Clause 21(5) uses "completion certificate is obtained from the competent authority." Section 21(5) uses "certificate for compl....