Computation of Income from Let Out Property in India
Taxable value of the property xxxxx Less: Municipal taxes actually paid xxxxx Annual value of the property xxxxx Less: deductions u/s 24 Repairs/ collection charges xxxxx Interest on loan borrowed for construction xxxxx Taxable property income xxxxx
- If the property is in the occupation of the owner and not let out during any part of the previous year, annual value will be taken as nil.
- When more than one house is held by the owner and he Is in occupation of the same for residential purpose, then only one house value at the choice of the owner will be taken as nil.
- For the other house, tax is computed as the property is let out.
- When annual of value is taken s nil, no deduction under the section 24 is allowed except in respect of interest paid on the capital borrowed for the construction/ acquisition of the property.
Profits & gains of business & profession
- Tax is to be paid by an assesse on the profit & gains of a profession carried on by him/ her.
- Business is defined as any trade, commerce or a manufacturing activity.
- Profession is linked with a job of an individual requiring some skill & thought and a special knowledge.
- A chartered accountant, lawyer, a doctor, and artist, and architect are examples of a professional.
- Gross income minus some expenses constitutes the net profit.
- But it is different from the taxable profit & gains which are to be ascertained in accordance with the income tax act.