More than one house property taxability

Tax queries 320 views 3 replies

CA JAY SHAH

Practicing Chartered Accountant

137 Points Joined July 2009

As per section 23(4) of income tax act, If there are more than one residential houses, which are in the occupation of the owner for his residential purpose, then he may exercise an option to treat any one of the houses to be self-occupied. The other house(s) will be deemed to be let out and annual value of such house(s) will be determined as per Sec. 23(1)(a).

However, if the assessee has a "house property which consists of two or more residential units" and all such units are self occupied, the annual value of the entire house property shall be taken as nil as there is only one house property, though it has more than one residential units.

Kindly explain the meaning of "house property which consists of two or more residential units" .

Which type of residential house falls under above catogry ?

(Note : above mention section text is taken from tutorial posted on incometaxindia.gov.in)

Replies (3)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

210771 Points Joined July 2016

if the assessee acquires more than one unit, but they are contiguous like being adjacent flats or flats situated one above the other and they are treated as one single unit, then, he can claim exemption for the cost of all those flats. Some of the criteria which will be applied for deciding this issue will be there being one common kitchen, one single entrance, internal access among the flats, use by one family, single property tax assessment and so on. The most important test will be the assessment of all the units as one single property for property tax purposes by the municipal authorities by which one single door number is allotted.

CA JAY SHAH

Practicing Chartered Accountant

137 Points Joined July 2009

Thank you sir.

suresh

proprietor

425 Points Joined May 2011

Assessment of all units as single unit is not possible. Actually as per terminology of a residential unit completes a unit when it has seprate electric meter, seprate local assessment tax, water connection and seprate main eneterance. Here the wordings are "a house property which consists of two or more residential units" Here the concept can be taken as adjoining resiential units, or like duplex flats on bunglow consists of two different units but used as combined residencial property as self occupied.