Income from House Property: rules on ownership, GAV treatment, and allowable housing loan interest deductions clarified.
Income from House Property arises where the assessee is owner, including freehold, leasehold and deemed ownership. Any two properties may be designated self occupied with the rest deemed let out; selection may be used to minimise taxable income. GAV is based on actual rent (net of unrealised rent) or expected rent as applicable; self occupied portions with nil GAV do not permit municipal tax deduction. Interest on housing loans is deductible on accrual, including loans taken to repay earlier loans, but unpaid interest is not; preconstruction interest is spread in equal instalments from completion. Joint borrowers may each claim interest deduction; arrears and unrealised rent received are taxable with a prescribed deduction. (AI Summary)