How is the annual value of a self-occupied property determined?

The annual value of a self-occupied property is determined as per Section 23 of the Income Tax Act. For a property occupied by the owner for residential purposes, the annual value is taken as nil. However, if the property has been vacated for a part of the year, the annual value for that period is determined based on the municipal value or fair rent. Legal Provision: Section 23(2) of the Income Tax Act, 1961. Supporting Case Law: – CBDT v. Govindram Seksaria [1966] 60 ITR 28 (SC) – Link: https://indiankanoon.org/doc/824229/ – Ratio: The Supreme Court held that when the owner occupies the property for residential purposes, the annual value is nil.

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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.