24 January 2012
Income from house property is charged in the hands of owner of building and land appurtenant thereto. in some of the case U/s 27 there are deemed owners on whose hand the income is charged if certain conditions are met. if you have taken property on lease more than 12 yrs not being on monthly basis for less than 1 yr then the income shall be charged on the basis of possession being deemed owner else ownership is mandatory.
30 July 2024
In the context of Section 24 of the Income Tax Act, 1961, the term **"acquired"** plays a significant role in determining eligibility for tax deductions related to income from house property. Let’s break down its meaning and implications:
### **Section 24 Overview**
Section 24 provides deductions from the income derived from house property under the following key sub-sections:
1. **Section 24(a):** Deduction for interest on borrowed capital used for the purpose of construction, acquisition, or repair of the house property. 2. **Section 24(b):** Deduction of up to ₹2 lakh for interest on housing loan for self-occupied property.
### **Meaning of "Acquired"**
The term **"acquired"** in this context is important for understanding eligibility for these deductions. Here’s what it generally implies:
1. **Acquisition vs. Possession:** - **Acquired** typically refers to the process of gaining ownership, which includes purchasing the property. It is not limited to mere possession. - **Possession** alone does not suffice for the purpose of claiming deductions. The property must be acquired in a manner that involves a legal transfer of ownership, usually through purchase or inheritance.
2. **Implications for Tax Deductions:** - **Ownership and Acquisition:** To claim deductions under Section 24, the property must be owned by the taxpayer and should be acquired by means of purchase, inheritance, or any other legal method that results in ownership. - **Owner as Acquirer:** For claiming deductions under Section 24, the term **"acquired"** means that the person claiming the deduction must be the legal owner of the property and should have acquired it through legal means.
3. **Legal and Tax Perspectives:** - **Purchase:** Buying a property is a common way of acquiring it. If you purchase a house, you are considered the acquirer and owner, and thus eligible for deductions under Section 24. - **Possession:** Merely possessing a property (e.g., renting it or inheriting it without formal legal transfer) does not qualify one for the deductions unless legal ownership is established.
### **Key Points to Remember:**
- **Legal Ownership:** To benefit from the deductions under Section 24, the property must be legally owned by the taxpayer. Acquisition implies a legal transfer of ownership. - **Documentation:** Proper documentation of the acquisition (such as a sale deed for a purchased property) is necessary to support claims for deductions.
### **Judicial Interpretations**
Courts and tribunals have reinforced that for claiming deductions, the term **"acquired"** aligns with the concept of legal ownership and not just possession. Therefore, to qualify for deductions, the property must be acquired in a manner that legally transfers ownership to the taxpayer.
### **Summary**
In summary, **"acquired"** in Section 24 means the taxpayer must have purchased or otherwise legally obtained ownership of the property. It is not limited to possession alone but includes the broader legal concept of acquisition, which involves formal ownership transfer.
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