Section 22 of Income Tax Act "Income from house property"
22. The annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him the profits of which are chargeable to income-tax, shall be chargeable to income-tax under the head "Income from house property".
Section 23
of Income Tax Act "Annual value how determined"
23. (1) For the purposes of section 22, the annual value of
any property shall be deemed to be-
(a) the sum for which the property might reasonably be
expected to let from year to year; or
(b) where the property or any part of the property is let
and the actual rent received or receivable by the owner in
respect thereof is in excess of the sum referred to in
clause (a), the amount so received or receivable; or
(c) where the property or any part of the property is let
and was vacant during the whole or any part of the previous
year and owing to such vacancy the actual rent received or
receivable by the owner in respect thereof is less than the
sum referred to in clause (a), the amount so received or
receivable :
Provided that the taxes levied by any local authority in
respect of the property shall be deducted (irrespective of
the previous year in which the liability to pay such taxes
was incurred by the owner according to the method of
accounting regularly employed by him) in determining the
annual value of the property of that previous year in which
such taxes are actually paid by him.
Explanation.-For the purposes of clause (b) or clause (c) of
this sub-section, the amount of actual rent received or
receivable by the owner shall not include, subject to such
rules as may be made in this behalf, the amount of rent
which the owner cannot realise.
(2) Where the property consists of a house or part of a
house which-
(a) is in the occupation of the owner for the purposes of
his own residence; or
(b) cannot actually be occupied by the owner by reason of
the fact that owing to his employment, business or
profession carried on at any other place, he has to reside
at that other place in a building not belonging to him,
the annual value of such house or part of the house shall be
taken to be nil.
(3) The provisions of sub-section (2) shall not apply if-
(a) the house or part of the house is actually let during
the whole or any part of the previous year; or
(b) any other benefit therefrom is derived by the owner.
(4) Where the property referred to in sub-section (2)
consists of more than 54[two houses]-
(a) the provisions of that sub-section shall apply only in
respect of 55[two] of such houses, which the assessee may,
at his option, specify in this behalf;
(b) the annual value of the house or houses, 56[other than
the house or houses] in respect of which the assessee has
exercised an option under clause (a), shall be determined
under sub-section (1) as if such house or houses had been
let.
(5) Where the property consisting of any building or land
appurtenant thereto is held as stock-in-trade and the
property or any part of the property is not let during the
whole or any part of the previous year, the annual value of
such property or part of the property, for the period up to
57[two years] from the end of the financial year in which
the certificate of completion of construction of the
property is obtained from the competent authority, shall be
taken to be nil.