Exempted Income from House property
There are certain cases where income from House property is exempted. As per section 10 of Income Tax Act 1961, below income are exempted and not to be included while calculating the total income of Assessee.
1. [Section 2(1)(c)] Agricultural House Property
Income from such house property which is situated on or in the immediate vicinity of agricultural land which is used for agricultural purposes by cultivator is exempted from tax.
2. [Section 11] House property held for charitable purposes
Any income from a house property held for charitable or religious purposes. Example- Rent received from the shop which is owned by charitable institute and temple.
3. [Section 23(3)] Self-occupied but vacant house
If assessee keeps one of his own houses reserved for self-occupation but is living in a rented house elsewhere or any other place due to his employment or profession the income from such house is taken to be nil while computing his/her total income.
4. House used for own business or profession
If house is used for the purpose of doing own business then there is no income chargeable to tax under this head from such house property.
5. [Section 10(24)] Property held by registered trade union
Income from a house property owned by a registered trade union is not to be included in its Gross total income.
6. Income from house property held by the
Local Authority, Scientific research institute, political party, educational institute working for spreading education and not to earn profit, Medical institute working for spreading medical service and not to earn profit.
7. [Section 23(5)] House Property held as Stock-in-Trade and not let out during the previous year
Where any house property is held as stock-in-trade and the property is not let during the whole or part of the year. The annual value of such property shall be taken as nil for the period of one year from the end of the financial year in which the certificate of completion is obtained.
8. One house property owned by a former ruler of Indian states
Ex-rulers of Indian states may be owning many palaces but only one palace of their choice shall be treated as a self-occupied house and shall be exempted.
9. One self-occupied house
If assessee owns one residential house, the net annual value of the same shall be taken as nil but in case he owns more than one house, then only one of his choice but normally of higher value shall be treated as a self-occupied one and other/others are treated as deemed to be let out.