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Report No. 12

23. Annual value.-

(1) For the purposes of section 22 [chargeability of income from house property], the annual value of any property shall be deemed to be the sum for which the property might reasonably be expected to let from year to year.

[Section 9(2), 1st para.]

(2) In determining the sum for which the property might reasonably be expected to let from year to year, due regard may be had, where the property is let to a tenant, to the following factors, besides others, namely-

(i) the annual rent agreed to be paid by the tenant;

(ii) the other obligations, if any, undertaken by the tenant on behalf of the owner, including the payment of taxes due to the Government or a local authority;

(iii) the annual value of the property, if any, as fixed by the local authority for the purposes of any tax on property levied by it; and

(iv) the rents of properties in the neighbourhood similarly situated and with similar advantages.

(3) Where the property is in the occupation of the owner for the purposes of his own residence, the annual value of the property shall be the annual value of the property determined in the same manner as if the property had been let, reduced by the lower of the following-

(i) one half of such annual value, or

(ii) one thousand eight hundred rupees;

but shall in no case exceed eleven per cent. of all income of the assessee, other than the annual value of such property, liable to inclusion in his total income under this Act.

[Section 9(2), 1st proviso]

(4) Where the property referred to in sub-section (3) consists of one residential house only and it cannot actually be occupied by the owner by reason of the fact that owing to his employment, business, profession or vocation 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 shall-

(a) if the house was not actually occupied by, the owner during the whole of the previous year, be taken to be nil, or

(b) if the house was actually occupied by the owner for a fraction of the previous year, be taken to be that fraction of the annual value determined under sub-section (3);

provided the following conditions are in either case fulfilled:-

(i) the house is not actually let, and

(ii) no other benefit therefrom is derived by the owner.

[Section 9(2), 2nd proviso, except last line.]

Income-Tax Act, 1922 Back

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