Computation of self occupied property

and un-realised rent subsequently realised

Provisions governing tax incidents on self
occupied property
Ifsuch property is used for the purpose of carrying on his
business or profession
 Income to be taxed under the head of “business or profession” u/s. 28

Ifsuch property is used for the residence of owner and

family member
◦ If only one property is used for such purpose

 If property is used through out the entire previous year,

 Nothing is taxable. Interest on borrowed capital is deductable.

 If property could not be occupied through out the entire previous year due
to employment, business or profession of the owner.
 Nothing is taxable. Interest on borrowed capital is deductable.
Cntd.
 When only a part of the property, being independent residential unit, is self-occupied and
the other part is let out,

 Income from the self occupied unit is not taxable.

 Interest on borrowed capital is deductable.
 Income from the unit which is let out is to be taxed under the head of Income from
house property u/s. 22.

 When the property is self occupied for a part of the previous year and let out for the rest,

 No concession is available, the house will be considered as a let out property.

If more than one property is used for residential purpose,

 Only one property selected by the assessee shall be treated as self occupied and rests shall be
treated as let out and taxed accordingly.
Special provisions when un-realised rent
is subsequently realised
Amount of rent received in arrears and
un-realised rent subsequently realised by a
an assessee to be charged in the previous
year when the rent is actually
received/realised.

 Irrespective of whether the assessee owns the house

property then or not.

 Deduction can be claimed up to 30% of the arrears of rent

or receipt of un-realised rent.