How is income from let-out properties computed?

Income from let-out properties is computed by first determining the Gross Annual Value (GAV) as per Section 23, which is the higher of the actual rent received or the municipal valuation. From the GAV, municipal taxes paid by the owner are deducted to arrive at the Net Annual Value (NAV). Further deductions under Section 24 (30% of NAV for repairs, interest on loan) are allowed to compute the taxable income from house property. Note: The treatment of unrealized rent and vacancy allowance may vary based on specific facts and court interpretations. Supporting Case Law: – Sultan Bros. (P) Ltd. v. CIT [1964] 51 ITR 353 (SC) – Link: https://indiankanoon.org/doc/693766/ – Ratio: The Supreme Court laid down principles for computing income from let-out properties.

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Prashant Thakur

The author has spent more than 30 years in the field of taxation. Wrote four books -3 on on Indian Tax Law and 1 on US tax law for cryptocurrency. Apart from https:taxworry.com , he also writes on https://irstaxapp.com which is for US tax laws. He is a tech enthusiast and manages a cloud computing company that publishes innovative software.