Sometimes, tax is payable on deemed income from unoccupied house

A house owner can claim only up to two properties as self-occupied

Section 23 of the Income-Tax (I-T) Act, 1961, governs how the annual value of a property is determined for calculating income from house property (and thereby arriving at a house owner’s tax liability). This section can be confusing as the rules that apply vary in different scenarios. Property owners need to understand them to avoid being hauled up by tax authorities.  

Let out throughout the year

A property that was let out throughout the financial year is governed by Sections 23(1)(a) and 23(1)(b).

Under Section 23(1)(a), if the property was let out throughout the previous year, its annual value is the expected sum