Interpreting Sections 22, 23, and 24: Taxation of Notional Rental Income from House Property and Vacancy Allowance

Notional rental income: ownership can trigger annual value assessment with standard deduction; vacancy allowance restricted when not let.

Ownership alone can give rise to taxable annual value by way of notional rental income, with annual value for unlet properties determined by reference to expected rent and, where applicable, by a proportionate measure of property cost. From that annual value the statutory 30% standard deduction and interest on borrowed capital are deductible. Vacancy allowance is not treated as available where properties remain unlet for the entire year, and balance-sheet disclosure of property ownership can support assessment.