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Taxable Income

How to determine annual value of self-occupied property?

In case of one self-occupied house property which has not been actually let out at any time, the annual value is taken as nil. If, one is having more than one house property using all of them for self-occupation, he is entitled to exercise an option in terms of which, the value of one house property as specified by him will be taken at nil. The annual value of the other self occupied house properties will be determined on notional basis as if these had been let out.

Annual Value of one house away from work place

A person may own a house property, say in Bangalore, which he normally uses for his residence. He is transferred to Chennai where he does not own any house property and stays in a rental accommodation. In such case, the house property income therefore would normally have been chargeable although he derives no benefit from the property. To save the taxpayer from hardship in such situations, it has been specifically provided that the annual value of such a property would be taken to be nil subject to the following conditions:

The assessee must be owner of only one house property.

He is not able to occupy the house property because of his employment, business etc. being away from place where the property is situated.

The property should not have been actually let.

He has to reside at the place of employment in a building not belonging to him.

He does not derive any other benefit from the property not occupied.

Source: Income Tax Department

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