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Incomes – Exempted from House Property


The following article deals with the Incomes Exempted from House Property . The income  in the article Incomes Exempted from House Property . The word exempt means free from an obligation from doing something. In the case of income tax, Exempt income refers to income which though is earned and received during the financial year is not taxable. Certain type income can be exempted from tax provided certain conditions are met which are defined in Income Tax Act. Exempt income includes tax-free sources of income, such as the interest on PPF, tax-free bonds and dividends.

Incomes-Exempted from House Property

Incomes -Exempted from House Property 


The following items are the Income Exempted from House Property .

  1. Income from house property situated in the immediate vicinity of or on the agricultural land and used as a dwelling house, store-house or other out-house by the cultivator or receiver or rent-in-kind. [Section 2(1A) read with Section 10(1)].
  2. Income from property held under trust for charitable or religious purposes (Section 11).
  3. Income from property occupied by the owner for the purposes of his business or profession carried on by him and the profits of which are chargeable to Income tax. If the profits of business or profession are not chargeable to tax because the income of that business or profession is exempt from tax, the income from the house property shall be chargeable under this head (Section 22).
  4. Income from residential house where the house consists of one residential house only and it could not be occupied by the owner on account of his employment, business or profession carried on at any other place and he lives at such place in a house which does not belong to him. The income shall be exempt provided:
    1. The house was not occupied by the owner during the whole of the previous year; or
    2. The house was not let; or
    3. No other benefit was derived by the owner [Section 23(3)]
  5.  Income from house property belonging to a Registered Trade Union [Section 10(24)]
  6. Income of an authority constituted under any law for the time being in force for the marketing of commodities; any income derived from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities [Section 10(29)].
  7. The annual value of any one palace in the occupation of an ex-ruler [Section 10(19A)]
  8. Income from house property belonging to a local authority [Section 10(20)].
  9. Income from property of an authority constituted for the purpose of planning, development, or improvement of cities, towns and villages [Section 10(20A)].
  10. Income from property of the approved scientific research association subject to fulfillment of certain conditions [Section 10(21)].
  11. Income from property of a games association [Section 10(23)].
  12. Income from property in the case of a person resident of Ladakh. [Section 10(26A)].
  13. Income from property of a political party (Section 13A).

Income which are included in gross total income but do not form part of the total income:

  1. Income of a co-operative society from the letting of go downs or ware- houses for storage, processing or facilitating the marketing of commodities [Section 80P(2)(e)].
  2. Income from house property of a co-operative society, not being a housing society or an urban consumers society or a society carrying on transport business or a society engaged in any manufacturing operations with the aid of power, where the gross total income of the society does not exceed rupees twenty thousand [Section 80P(2)(f)].

For the Computation of Annual value of House Property and Deductions Click here.

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